Adobe Earnings For The Fiscal Fourth Quarter Was Strong, Changes In Loyalty Programs Of American Airlines
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Adobe showed very good results, better than expected. Airlines have started tightening requirements again in an attempt to find the right balance to ensure programs remain attractive.
Adobe gain profits
Business software companies indicated that customers are more cautious in their spending plans due to the difficult economic situation.
On Thursday, Adobe also released its earnings forecast for the current quarter, which was better than Wall Street analysts had predicted. The company forecasts fourth-quarter revenue up 10% thanks to continued strong demand for its software and services.
Overall, Adobe reported earnings of $1.18 billion, or $2.53 per share, for the quarter ended Dec. 2, compared to $1.23 billion, or $2.57 per share, in the prior year.
While Adobe left its forecast for the current fiscal year unchanged, it said it expects adjusted profits of $3.65 to $3.70 for the current quarter.
The software company announced a plan to buy hot startup Figma in the quarter. Adobe hopes the deal will be finalized in the coming months.
Adobe shares, which have fallen 42% this year to Thursday's close, are up 5.7% in after-hours trading.
Airlines Loyalty Programs
Many airlines offer loyalty programs to their customers. Thanks to such programs, they encourage the use of their services by offering additional services as part of the points earned in the program. The most common practice of awarding points is to charge them for the cost of the ticket.
Airlines have relied heavily on their frequent flyer programs during the pandemic. Co-branded credit cards remained a stable source of revenue as customers swiped even when they weren't buying airline tickets. And airlines used their frequent flyer programs as collateral for billions of dollars in loans as they scrambled for cash as their appetite for travel dried up.
Carriers have made it easier for people to maintain and gain status during the pandemic in an effort to keep customers. But programs have also grown, with some customers complaining that providing premium cabin and lounge seats has become more competitive.
American Airlines Group Inc. raised the bar in achieving Gold status. Starting in March, members of American’s AAdvantage program will need to earn 40,000 “loyalty points” to reach Gold, its lowest tier of status, up from 30,000. That level includes benefits such as a free checked bag, earlier boarding and access to free upgrades if there is availability. American also introduced new perks for people who have 15,000 points and haven’t yet earned status, are between tiers or who have already reached the upper level. Requirements to qualify for other status tiers will remain unchanged.
Delta Air Lines Inc. is also reviewing requirements for frequent flyers to access luxury lounges to reduce overcrowding.
Starting next year, Delta travelers will need to spend 33% more on flights to qualify for Gold, Platinum and Diamond Medallion status in 2024. Delta has not made any changes to its requirements for the number of miles and distances a person must travel.
American Airlines Group Inc shares has been quite low for the last two quarters. The current low was last recorded in the second half of June. Looking at the broader timeframe, the current stock price resembles the level of the pandemic (2020). A similar stock price move is for Delta Air Lines, Inc. (DAL). The current price level of 33.25 is also reminiscent of the 2020 pandemic period
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Source: wsj.com, finance.yahoo.com
