Southwest and American Airlines finally turned a profit, but Covid risks loom: CNBC After Hours
CNBC.com's Pippa Stevens brings you the day's top business news headlines. On today's show, CNBC.com's airlines reporter Leslie Josephs explains why airlines might have a hard time staying profitable in 2021. Plus, Twitter and Snap beat Wall Street expectations with strong second-quarter earnings.
American, Southwest post quarterly profits, boosted by travel surge, federal aid
American Airlines and Southwest Airlines posted second-quarter profits Thursday, getting a lift from federal aid and a surge in travel demand.
Fort Worth, Texas-based American reported net income of $19 million, snapping five consecutive quarters of losses, thanks in part to more than $1 billion in federal payroll support. Revenue for the three months ended June 30 came in at $7.48 billion, up from just $1.6 billion a year earlier and ahead of Wall Street analysts' forecasts, as customers returned to the skies in droves.
Adjusting for one-time items, American had a loss of $1.1 billion or $1.69 as share.
American said it plans to pay down $15 billion in debt by 2025. The most indebted of the U.S. airlines, American had a total debt of about $48 billion as of the end of the first quarter, according to FactSet.
Twitter posts fastest revenue growth since 2014 in pandemic rebound
Twitter shares rose as much as 9% in extended trading on Thursday after the social media company announced second-quarter earnings that came in stronger than analysts had anticipated.
Twitter's revenue grew 74% year over year in the quarter, according to a shareholder letter, with the company citing "a broad increase in advertiser demand." In the prior quarter, revenue had risen 28%. Growth accelerated as the company lapped a quarter when revenue declined by almost 19%, resulting in the strongest growth since 2014.
The number of monetizable daily active users, or Twitter users who view advertising on the site, grew by 11%, Twitter said.
Snap pops more than 16% on earnings beat and user growth
Snap's stock rose more than 16% on Thursday after the company reported its second-quarter earnings, beating expectations across the board for earnings, revenue and user growth.
Snap said the company was not impacted by Apple's iOS 14.5 privacy changes as it had anticipated that it would be. This was due to the mobile operating system update rolling out later than expected, iOS users being slow to update their devices and Snap observing "higher opt-in rates than we are seeing reported generally across the industry, which we believe is due in part to the trust our community has in our products and our business," Jeremi Gorman, Snap's chief business officer, said in her prepared remarks.
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