U.S. AIRLINES STILL PILING UP LOSSES BUT SAY DEMAND RISING
Airlines are piling up billions of dollars in additional losses as the pandemic chokes off air travel, but a recent uptick in passengers, however modest, has provided some hope.
American Airlines on Thursday reported a loss of $2.4 billion and Southwest Airlines lost $1.16 billion in the third quarter, typically a very strong period of air travel that includes most of the summer vacation season. Revenue plunged at both airlines.
Combined with earlier losses reported by Delta and United, the four largest U.S. airlines have lost at least $10 billion in each of the last two quarters. It’s an unprecedented nosedive that has caused the once highly profitable airlines to forage for billions of dollars in government aid and private borrowing to hang on until more travelers return.
The airlines, however, are offer
“During the third quarter, our business improved significantly with greater-thanexpected revenues driven by strong demand in the broadband data access market, as well as market share gains across multiple product lines,” said Chief Executive Kishore Seendripu.
The upgrade includes revenue from the recent acquisition of Intel’s Connected Home chip and software division. MaxLinear booked partial revenue from the acquisition in the third quarter following the close of the deal in early August.
Analysts pointed to the contribution from Intel’s Connected Home business as good news. It now looks as if the acquisition will be a bigger revenue contributor than originally expected, said Christopher Rolland, an analyst with Susquehanna Financial.
“We are encouraged by market share gains in the broadband business, although we will look for sustainability moving forward as Broadcom has historically been a strong competitor here,” said Rolland. “While we await more details, we view today’s news as a substantial beat.”
The company did not pre-announce third-quarter profit. It did say, however, that it expects gross profit margins of about 52 percent, compared with prior guidance of 42.5 percent under Generally Accepted Accounting Principles.