American Airlines’ fourth-quarter earnings report revealed a profit increase, but its first-quarter earnings outlook for 2025 fell short of expectations. On January 23, 2025, the airline announced an adjusted loss per share forecast of 20 to 40 cents, surpassing analysts’ predictions of a 4-cent loss, which led to a more than 6% drop in its stock price.
- American Airlines' Q1 earnings outlook disappointing.
- Shares dropped over 6% after forecast.
- Adjusted loss per share estimated at 20-40 cents.
- Fourth-quarter profit increased to $590 million.
- Revenue rose to $13.66 billion, exceeding expectations.
- Trans-Pacific revenue surge boosted overall sales.
American Airlines reported a significant profit of $590 million for the fourth quarter of 2024, a notable increase from $19 million in the same period the previous year. The airline’s revenue for this quarter reached $13.66 billion, exceeding Wall Street estimates of $13.40 billion. This growth was driven by a 4.6% increase in sales, with both domestic and international revenues rising, particularly in trans-Pacific routes.
Despite the positive fourth-quarter results, American Airlines’ forecast for the first quarter of 2025 indicates challenges ahead. The airline expects an adjusted loss per share of 20 to 40 cents, a significant deviation from the anticipated 4 cents loss. This outlook is attributed to current demand Trends and rising fuel costs. Additionally, American Airlines anticipates a decline in capacity by as much as 2% compared to the previous year, contributing to an expected rise in unit costs, excluding fuel, in the low single-digit percentage range.
Key performance indicators from the fourth quarter include:
- Earnings per share: 86 cents adjusted vs. 64 cents expected
- Revenue: $13.66 billion vs. $13.40 billion expected
In summary, while American Airlines demonstrated strong performance in the fourth quarter of 2024, the airline faces a challenging start to 2025, with a forecasted loss that has raised concerns among investors.
In conclusion, American Airlines’ recent earnings report highlights a contrast between a successful fourth quarter and a concerning outlook for the upcoming quarter, emphasizing the complexities of the airline industry amid fluctuating demand and costs.
