American Airlines Group Inc (NASDAQ:AAL) stock rose 0.76% (As on January 24, 11:25:46 AM UTC-4, Source: Google Finance) after the company’s first-quarter earnings outlook fell short of analysts’ estimates. American spent much of the last year working to reverse the fallout of a business travel sales strategy that pushed for direct bookings instead of travel agencies. American has since abandoned that failed strategy and last year said that previous approach would cost it $1.5 billion in 2024 revenue. However, it also sealed a new credit card deal with its partner Citi. Compensation from its existing deals with Citi and Barclays rose 17% from 2023 to $6.1 billion last year
AAL in the fourth quarter of FY 24 has reported the adjusted earnings per share of 86 cents, beating the analysts’ estimates for the adjusted earnings per share of 64 cents, according to Wall Street estimates compiled by LSEG. Special items last year included the impact of labor contracts, a write-down of some regional aircraft and adjustments related to some of its senior debt. The company had reported the adjusted revenue of $13.66 billion in the fourth quarter of FY 24, beating the analysts’ estimates for revenue of $13.40 billion. American’s fourth-quarter profit rose to $590 million from $19 million on sales that were up 4.6% on the year to $13.66 billion. Both domestic and international revenue rose, led by a surge in trans-Pacific revenue.
The carrier forecast an adjusted loss per share of 20 cents to 40 cents for the first three months of 2025 based on current demand trends and a fuel price forecast, a wider loss than the 4 cents analysts were expecting, according to LSEG.
The airline said it expects unit costs, excluding fuel, to rise in the low-single-digit percentage points over the first quarter of 2024 driven by lower capacity, which it expects to fall as much as 2% over last year; a higher mix of smaller, regional jet flying; and new labor agreements it finalized last year. The earnings outlook contrasts with sunnier forecasts from rivals United and Delta earlier this month, though American’s full-year earnings forecast of between $1.70 and $2.70 is in line with analysts’ estimates.
American said it expects revenue to be up between 3% and 5% in the first quarter versus the same period in 2024, and up as much as 7.5% for the full year compared with 2024.