American Airlines Improved Revenue, But Shares Fell. Here’s Why

Must read

JETHRO TULL’s IAN ANDERSON To Guest On OPETH’s Next Album

Opeth seems to be going further down the progressive rock rabbit...

Moderna Stock Shows Surprising Strength; Key Rating Upgraded

Moderna (MRNA) stock surged as much as 8% Wednesday before settling to a 5.8% gain after it reported promising results for a melanoma...

CORROSION OF CONFORMITY, TROUBLE, D.R.I. & More Set For First-Ever Heavy Chicago Festival

Heavy Chicago will take place on October 28 and November 4...

MAUL’s New Song “The Sacred And The Profane” Is Just Brutal

Maul will release their 20 Buck Spin debut EP Desecration And...

American Airlines improved its operating revenue by 17%, but shares fell after its forward guidance underwhelmed compared to other airlines’ outlooks.

American Airlines passenger jet (Boeing 737).

 Getty Images/Robert Alexander

Despite best-ever second-quarter flight completions over Memorial Day weekend, American Airlines Group (AAL) shares fell more than 5% after the company raised its guidance for the year by less than investors had expected, based on other airlines’ results.

Key Takeaways

  • American Airlines posts a record quarterly revenue of $14.1 billion and earnings of $1.92 a share.
  • Fuel costs dropped 35%, and the airline produced a 17% jump in operating revenue.
  • AAL shares fell more than 5% as its guidance for the year was short of what the airlines’ competitors are forecasting.

American Airlines reported record quarterly revenue of $14.1 billion in the second quarter, an increase of 4.7% from the same period a year ago.  The Fort Worth, Texas-based airline said strong demand, especially in June, helped drive the result.

For the three months ending in June, the airline posted an adjusted net income of $1.4 billion, or $1.92 a share, better than the $533 million in income at $0.76 a share it reported in the 2022 second quarter.

American delivered an average load factor of 86.2%, a figure that shows how much capacity at which flights are operating, which was in line with the 2022 second-quarter load factor of 86.9%. The airline saw its fuel costs drop 35% from the year-earlier quarter. 

American increased its operating margins to 15.4% in the second quarter, up from 7.5% over the same period last year. The company said it delivered a record number of flight completions on Memorial Day after operating its busiest-ever schedule for that holiday.

Shares Fall as Results Fail to Meet Competitors 

While American Airlines showed improvement in its year-over-year performance, so have the other airlines. Delta Air Lines (DAL) last week reported an 18.7% jump in operating revenue after it pulled down record international travel sales in June. 

American Airlines adjusted its third-quarter earnings to between $0.85 and $0.95, in line with the estimates from analysts of $0.90. It also raised its full-year guidance to adjusted earnings of $3 to $3.75 a share, better than the high of $3.50 a share it forecasted last quarter, and the $3.04 a share of profits that analysts were anticipating.

However, American’s forecasts were short of what their competitors were promising. A day earlier, United Airlines raised its third-quarter expectations above analysts. And last week, Delta moved its full-year outlook up to $6 to $7 earnings per share, above its previous target of $5 to $6. 

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

More articles

Latest article

Bank of America increases dividend by 9% after Fed stress test

NEW YORK (Reuters) - Bank of America (BofA) said on Wednesday it planned to increase its quarterly common stock dividend to 24 cents per...

IN THIS MOMENT Streams Cover Of BJORK’s “Army Of Me”

In This Moment is now streaming their cover of Bjork's "Army...

How to Avoid the Social Security Tax Torpedo

A senior couple dealing with unexpected Social Security taxes, commonly referred to as the Social Security tax torpedo.While retirees may be chagrined to discover...

Spineless House Republicans Support Biden Impeachment Because They Fear Trump

Rep. Jared Moskowitz said that centrist House Republicans are supporting the Biden impeachment investigation because they are afraid of Trump. Moskowitz...

Charlie Munger warned that a mega-mansion can make you ‘less happy.’ He lived in the same modest house for seven decades

Charlie Munger, who passed away this week at age 99, could have afforded a mega-mansion—or several of them. Instead, the billionaire investor stayed put...