By American Airlines has announced a reduction in its full-year adjusted profit outlook after reporting a loss in the third quarter. The airline attributes this loss to higher costs and a one-time charge associated with its latest contract with the pilots’ union.
Despite the loss, American Airlines remains confident in the demand for travel, noting growth in corporate and government revenue as well as business travel.
Following a nearly 5% decline in shares on Wednesday, the stock saw a modest premarket trading increase of less than 1%. However, American Airlines stock continues to hover near three-year lows.
The broader airline industry also experienced a decline in stock prices after United Airlines warned that the Israel-Hamas conflict could impact fourth-quarter profits.
Here is a breakdown of American Airlines’ performance in the third quarter:
- Revenue: Revenue increased by 0.1% to $13.48 billion, slightly below the expected $13.51 billion.
- Loss: American Airlines reported a quarterly loss of $545 million, or 83 cents per share, compared to a profit of $483 million, or 69 cents per share, in the same period last year. The loss was largely attributed to the one-time charge related to the pilots’ union contract.
- Adjusted profit: Adjusted earnings, excluding one-time items, amounted to 38 cents per share. Analysts had predicted adjusted earnings of 25 cents per share.
- Outlook: American Airlines has revised its full-year adjusted profit outlook to a range of $2.25 to $2.50 per share, down from the previous projection of $3 to $3.75 per share.
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