American Airlines‘ first-quarter earnings outlook on Thursday fell short of analysts’ estimates, sending shares down roughly 10%.
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 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 spent much of the last year reversing a business-travel sales strategy that backfired. 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, American said.
“As we look ahead to this year, American remains well-positioned because of the strength of our network, loyalty and co-branded credit card programs, fleet and operational reliability, and the tremendous work of our team,” CEO Robert Isom said in a news release.
American said it expects revenue to be up between 3% to 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.
Here is how American performed in the fourth quarter compared with Wall Street estimates compiled by LSEG:
- Earnings per share: 86 cents adjusted vs. 64 cents
- Revenue: $13.66 billion vs. $13.40 billion expected
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.