By Callum Keown
American Airlines looks set to fly above broader sector pressure despite a lackluster first-quarter performance.
That's because the carrier surprised to the upside with its June-quarter guidance and stuck to its full-year outlook.
With the stock more than 9% down in April, through Wednesday's close, that should be enough give the shares a boost. The stock climbed 5% in premarket trading.
American's guide for earnings of between $1.15 and $1.45 in the second quarter was higher than the $1.15 expected by analysts surveyed by FactSet. Wall Street isn't convinced by American's full-year guidance for earnings of between $2.25 and $3.25 -- the consensus is for $2.34. But the airline reiterated that guidance could change some minds.
The stock, up just 1.3% in 2024, has underperformed American's rivals Delta Airlines, up 19%, and United Airlines, which has climbed 28% this year.
The carrier reported an adjusted loss of 34 cents a share on record first-quarter revenue of $12.6 billion. Wall Street was expecting an adjusted loss of 27 cents per share on revenue of $12.6 billion, according to FactSet estimates. For the full-year, analysts expect earnings of $2.34 per share on revenue of $55.3 billion.
The sector came under pressure Wednesday as the Biden administration unveiled new rules requiring airlines to automatically issue refunds for canceled flights. Southwest Airlines' disappointing earnings update Thursday added to the gloom.
But American could well rise above all that, even if the CEO wasn't left enthused by the first-quarter performance. "While we aren't satisfied with our first-quarter financial results, we have a strong foundation in place, and we remain on track to deliver on our full-year financial targets."
It's not spectacular, but it'll do.
Write to Callum Keown at callum.keown@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 25, 2024 07:45 ET (11:45 GMT)
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