American Airlines' stock jumps after an upbeat profit outlook and record revenue

By Tomi Kilgore

Air carrier swung to a wider-than-expected loss, amid a 'significant increase' in the cost of fuel

Shares of American Airlines Group Inc. were in rally mode Thursday, after the air carrier reported a wider-than-expected first-quarter loss but provided an upbeat profit outlook for the current quarter, as revenue rose to record levels.

"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," said Chief Executive Robert Isom.

The stock (AAL) ran up 5.6% in premarket trading, to put it on track to open at a three-week high.

The company swung to a net loss of $312 million, or 48 cents a share, from net income of $10 million, or 2 cents a share, in the same period a year ago. Excluding nonrecurring items, the adjusted per-share loss of 34 cents compared with the FactSet loss consensus of 27 cents.

Revenue grew 3.1% to a record $12.57 billion, but that was just shy of the FactSet consensus of $12.60 billion.

Operating expenses rose 6.9%, as maintenance, materials and repair costs soared 24.2% and as employee pay and benefits jumped 17.8%.

Load factor improved to 81.5% from 80% to top expectations of 80.7%.

The company said it achieved its best-ever first-quarter completion factor, despite air-traffic control challenges and "significant" weather events.

Looking ahead, the company expects second-quarter adjusted EPS of between $1.15 and $1.45, compared with the FactSet consensus of $1.15. For 2024, the company reiterated its adjusted EPS outlook of between $2.25 and $3.25.

The stock has gained 1.3% year to date through Wednesday, while the U.S. Global Jets ETF (JETS) has ascended 7.4% and the S&P 500 has advanced 6.3%.

-Tomi Kilgore

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04-25-24 0813ET

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