American Airlines (AAL) Earnings Q3 2023

An American Airlines Boeing 787-9 Dreamliner takes off from Barcelona Airport in Barcelona on February 24, 2023.

Janwalls | NoorPhoto | Good pictures

American Airlines posted a third-quarter loss on Thursday and cut its profit forecast for the year, partly in response to higher fuel prices.

On Thursday, it expected earnings of $2.25 to $2.50 per share on an adjusted basis, down from July estimates of $3 to $3.75 but largely in line with analyst expectations. American said it expects a full-year adjusted operating margin of 7%, up 10% from its previous forecast.

In the fourth quarter, American estimated it would be flat.

Here’s how American Airlines fared In the third quarter Compared to what Wall Street expected, based on average analysts’ estimates compiled by LSEG, formerly Refinitiv:

  • Adjusted earnings per share: 38 cents and 25 cents expected
  • Total Revenue: $13.48 billion vs. $13.52 billion expected

Airlines are enjoying a rebound in travel since the pandemic ended, especially to international destinations, where fares have fallen broadly from last year.

American said it expects unit revenue to decline 5.5% to 7.5% in the fourth quarter, unit costs excluding fuel to increase 5% to 7% annually and capacity to increase 4.5% to 6.5% from the same period in 2022.

The company lost $545 million, or 83 cents per share, in the third quarter, compared with a profit of 69 cents per share, or $483 million, in the same period a year earlier. It was the carrier’s first loss since the first quarter of 2022. Capacity increased by 7% from a year ago.

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In a note to employees, CEO Robert Isom said, “Despite headwinds such as significantly higher fuel costs, which led to lower earnings in the quarter, our team continues to excel in controlling what we can control, which will allow us to succeed no matter the environment.”

Adjusted for higher costs associated with the pilots’ new labor contract, the company reported earnings of $263 million, or 38 cents per share.

Revenue increased by 0.1% from the previous year.

American will hold a call with analysts and the media at 8:30 a.m. Thursday to discuss the results and its outlook.

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