American Airlines (NASDAQ:AAL) slashed its full-year earnings guidance, overshadowing a minor beat in second-quarter earnings.
The airline reported adjusted earnings of $1.09 per share, slightly surpassing the analyst estimate of $1.07. However, quarterly revenue fell short of expectations, coming in at $14.3 billion compared to the Street estimate of $14.39 billion.
Despite achieving a 2% year-over-year increase in second-quarter revenue, setting a company record, American Airlines revised its full-year earnings guidance significantly downward. The new range is $0.70 to $1.30 per share, starkly below the Street estimate of $1.81 and the previous guidance of $2.25 to $3.25.
The midpoint of the revised guidance, $1.00, indicates a much more conservative outlook from the airline. For the third quarter of 2024, American Airlines expects earnings per share to be approximately breakeven, reflecting the ongoing effects of its earlier sales strategy. CEO Robert Isom attributed the second-quarter challenges to the company's prior sales and distribution strategies, as well as an imbalance in domestic supply and demand.