American Airlines faced a challenging first quarter, reporting a loss, but the company’s forecast for the current period has exceeded analysts’ expectations. The airline anticipates earning between $1.15 and $1.45 per share in the second quarter, on an adjusted basis, well above the $1.18 average estimate compiled by LSEG analysts. Additionally, American reiterated its full-year earnings forecast of between $2.25 and $3.25 per share.
CEO Robert Isom acknowledged the disappointment with the first-quarter financial results but expressed confidence in the company’s foundation and its ability to achieve its full-year financial targets. Despite the challenges faced in the first quarter, Isom remains optimistic about American Airlines’ performance in the coming months.
American Airlines expects second-quarter capacity to increase by 7% to 9%, with unit revenues projected to decline by 1% to 3% compared to the previous year. The airline, like its competitors Southwest, United, and Alaska, has been impacted by Boeing’s recent quality control and safety issues. American will receive fewer aircraft from Boeing than initially planned, but Isom does not anticipate a significant impact from the delays.
In the first quarter, American Airlines reported a loss of $312 million, or 48 cents per share, compared to a profit of $10 million, or 2 cents per share, in the same period last year. Adjusting for one-time expenses, including costs related to new labor contracts, the airline recorded a loss of $226 million, or 34 cents per share. Operating expenses increased by nearly 7%, primarily driven by an 18% rise in salaries and related costs. Despite the financial challenges, revenue rose by 3.1% to $12.57 billion.
American Airlines’ financial performance in the first quarter showcased the impact of industry-wide challenges and internal operational adjustments. While the company reported a loss, its outlook for the second quarter and full year indicates a sense of cautious optimism. With a focus on cost management and operational efficiency, American Airlines aims to navigate the current market conditions and deliver on its financial commitments to shareholders. As the aviation industry continues to evolve, American Airlines remains committed to adapting to changing circumstances and positioning itself for long-term success.