American Airlines cut Profit Outlook

American Airlines (NASDAQ: AAL) shares fell by more than 10% in early trading Thursday, after the U.S. airline cut its profit forecast and warned investors that it struggled to produce revenue growth at the end of 2018.

According to CNBC, the cuts dealt another blow to airline stocks, which was already in turmoil over the past year as investors fretted about higher fuel costs and the industry’s ability to increase fares and revenue. Other carriers were affected as a result of American Airlines

actions. Shares of Delta Airlines (NYSE: DAL) fell more than 4%, while Southwest Airlines (NYSE: LUV) and United Continental Holdings (NASDAQ: UAL) were each down more than 4%.

American Airlines said its revenue seat per mile, a key industry metric, rose by 1.5% in the fourth quarter of last year from the year-earlier period. This was a stark contrast to the previous range of 1.5% to 3.5% it gave investors in the fall. American also noted that it expects to post per-share earnings of between USD 4.40 and USD 4.60, down from its initial estimate in October of USD 4.50 to USD 5.

The Company’s shares have stooped far more than its competitors. Over the last 12 months, American’s stock price dropped 44%, as per CNBC. And pressure on American’s Chief Executive Officer Doug Parker is at an all-time high. The Company will report its fourth-quarter and full-year results at the end of the month.

4 Comments
  1. David Koenig 2 weeks ago
    Reply

    $AAL down sharply today on lower guidance for 4Q unit revenue and 2018 EPS. Shares of @AmericanAir are off to a wacky, roller-coaster start in 2019.

    • Glenn M 1 week ago
      Reply

      market bounce is over, just picked up some puts. Sub 30 on the way

  2. Zack Clayton 1 week ago
    Reply

    the government shutdown will impact the industry’s corporate travel business the longer it lasts. American in particular has exposure to the government with its hub at Washington $AAL $DAL $UAL

  3. Susan Meleern 1 week ago
    Reply

    Not sure how much farther this can go, if the market opens higher tomorrow, bulls may be in control

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