American Airlines (AAL) Q4 2024 results

Robert Isom, CEO of American Airlines: Very optimistic about the airline's efficiency in 2025

American AirlinesIts first-quarter earnings outlook fell in need of analysts' estimates on Thursday, sending the stock down greater than 7% in early trading.

The airline forecast an adjusted loss per share of 20 cents to 40 cents for the primary three months of 2025 based on current demand trends and a fuel price forecast, a bigger loss than the 4 cents expected by analysts, LSEG said.

The airline said it expects unit costs (excluding fuel) to extend by low single-digit percentage points in the primary quarter of 2024, driven by lower capability, which is anticipated to fall by as much as 2% year-on-year; a better mixture of smaller, regional jet flights; and latest employment contracts concluded last yr.

The profit outlook contrasts with the more optimistic forecasts of its competitors United And delta Earlier this month, although American's full-year profit forecast was between $1.70 and $2.70, according to analysts' estimates.

American has spent much of the last yr reversing the results of a company travel sales strategy that pushed direct bookings as a substitute of travel agents. American has since abandoned that failed strategy, saying last yr that the previous approach would cost the corporate $1.5 billion in sales in 2024.

However, the corporate also entered right into a latest bank card agreement with its partner City. Compensation from existing contracts with Citi and Barclays rose 17% from 2023 to $6.1 billion last yr, American said.

“As we look ahead to this year, American remains well positioned due to the strength of our network, our loyalty and co-branded credit card programs, fleet and operational reliability, and the tremendous work of our team,” CEO Robert Isom said in a press release.

American expects first-quarter revenue to extend between 3% and 5% in comparison with the identical period in 2024 and for the complete yr to rise 7.5% in comparison with 2024.

Here's how American performed within the fourth quarter in comparison with Wall Street estimates compiled by LSEG:

  • Earnings per share: 86 cents adjusted from 64 cents
  • Revenue: $13.66 billion versus expected $13.40 billion

American's fourth-quarter profit rose from $19 million to $590 million on revenue growth of 4.6% yr over yr to $13.66 billion. Both domestic and international sales increased, led by a rise in trans-Pacific sales.

Adjusted for one-time items, American earned 86 cents per share, greater than analysts expected. Special items last yr included the impact of labor contracts, a write-down of some regional aircraft and adjustments related to a few of its senior liabilities.

American Airlines shares plunge as outlook falls short of expectations

image credit : www.cnbc.com