Earnings Preview: AMR Corp.

FORT WORTH, Texas

AMR Corp., the parent of American Airlines, reports its second-quarter results on Wednesday.

WHAT TO WATCH FOR: Analysts were brutal in their criticism of the company after dismal first-quarter results, and they'll be looking for indications that AMR executives have turned things around after losing $4 billion since the start of 2008.

Traffic on American hasn't improved much since the depths of the recession last year. AMR may sell off its American Eagle regional airline, but some analysts are looking for bolder steps including fewer flights to drive up prices.

Hudson Securities analyst Daniel McKenzie said last week that AMR has too much debt, a weak regional-flying strategy, labor problems and that it may face even more competition in the critical Latin American market.

WHY IT MATTERS: American was the world's biggest airline until 2008, when it was surpassed by Delta, and it could fall to No. 3 if United and Continental pull off their plan to combine into a single company.

That means more than wounded pride for American. Business travelers, who bring in a lot of money, favor airlines with the biggest networks and most convenient schedules. The fear is that those lucrative customers may soon be tempted to switch to other carriers.

WHAT'S EXPECTED: Analysts surveyed by Thomson Reuters expect the Fort Worth-based AMR to lose 3 cents per share excluding one-time gains and losses. While that's only about $10 million, AMR is the only large U.S. airline company expected to post a loss. Analysts forecast revenue of $5.71 billion.

LAST YEAR'S QUARTER: AMR reported a loss of $390 million, or $1.39 per share, on revenue of $4.89 billion in the second quarter of 2009.