American Airlines shares fall on weak outlook for 1Q profit

By AP News


Shares of American Airlines are falling on word from the carrier that first-quarter profit could be below Wall Street expectations

American Airlines-Outlook

FORT WORTH, Texas (AP) — American Airlines said Wednesday that first-quarter profit could be below Wall Street expectations as airlines face higher costs, sending the shares lower in morning trading.

American said it expects to earn between a penny and 5 cents per share for the quarter that just ended.

That is better than American's January forecast of a break-even quarter, but analysts had expected an adjusted profit of 5 cents per share, according to a FactSet survey.

Airlines say demand for travel remains strong despite inflation and economic uncertainty, which helps them charge more. American said revenue for each mile flown by passengers — a stand-in for fares and fees — will be 25.5% higher than a year ago.

However, airlines also face rising costs for labor and fuel heading into the critical summer travel season.

Raymond James analyst Savanthi Syth said she had expected stronger results from American because it benefits more than others from strong demand for travel within the U.S. and nearby destinations in Latin America.

Cowen analyst Helane Becker said, however, that the outlook was stronger than she expected. She said second-quarter revenue should remain strong because demand is high but airlines have not returned to 2019 levels of passenger-carrying capacity.

American said in a regulatory filing that it operated more flights than expected in the first quarter, which led to about 2% more fuel consumption than previously forecast. American paid close to $3.30 per gallon in the quarter.

Shares of Fort Worth-based American Airlines Group Inc. were down 9% in morning trading.


Author: AP News

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Originally published by Associated Press, Digitonic Ltd (and our owners, directors, officers, managers, employees, affiliates, agents and assigns) are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above.

Sign up for Investing Intel Newsletter