On Thursday, American Airlines reported a third-quarter deficit and reduced its profit outlook for the year.
On Thursday, American Airlines reported a third-quarter deficit and reduced its profit outlook for the year, owing in part to rising fuel prices. The airline said Thursday that it expects to earn between $2.25 and $2.50 per share on an adjusted basis this year, down from a $3 to $3.75 estimate in July but broadly in line with analyst expectations. American forecasts a 7% adjusted operating margin for the whole year, down from a 10% margin previously predicted.
American expected to break even in the fourth quarter.Based on an average of analyst forecasts compiled by LSEG, formerly known as Refinitiv, here’s how American Airlines did in the third quarter compared to what Wall Street expected:
- Adjusted earnings per share: 38 cents vs. 25 cents expected
- Total revenue: $13.48 billion vs. expected $ 13.52 billion
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American Airlines Traffic
While airlines have seen a boost in traffic since the pandemic ended, particularly to international destinations, costs have generally declined since last year. American forecasts unit revenue to fall between 5.5% and 7.5% year on year in the fourth quarter, with unit costs excluding fuel rising 5% to 7% year on year and capacity rising 4.5% to 6.5% from the same period in 2022.
During the third quarter, the firm lost $545 million, or 83 cents per share, compared to a profit of $483 million, or 69 cents per share, the previous year. The deficit was the airline’s first since the first quarter of 2022. Capacity increased by 7% year on year.
In a statement to employees, CEO Robert Isom said that “while there were bumps along the way, such as significantly higher fuel costs that resulted in lower earnings in the quarter, our team continues to excel at controlling what we can control, which will make us successful no matter the environment.” After adjusting for greater costs related with the pilots’ new labor deal, the business earned $263 million, or 38 cents per share.
Revenue increased by 0.1% year on year. The airline said Thursday that it expects to earn between $2.25 and $2.50 per share on an adjusted basis this year, down from a July estimate.
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