American Airlines reports Q3 loss and adjusts downward 2023 profit projection

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American Airlines reported a third-quarter loss and adjusted its 2023 profit outlook due to the impact of rising fuel prices. The airline now anticipates earning between $2.25 and $2.50 per share for the year, down from its previous estimate of $3 to $3.75, but this revision aligns with analysts’ expectations. The full-year adjusted operating margin is projected to be 7%, a decrease from the earlier forecast of up to 10%. For the fourth quarter, American Airlines expects to break even.

In the third quarter, American Airlines outperformed Wall Street expectations in some key areas. Adjusted earnings per share came in at 38 cents, surpassing the anticipated 25 cents. However, the total revenue of $13.48 billion fell slightly short of the expected $13.52 billion. Despite a resurgence in travel following the pandemic, fares have generally declined compared to the previous year.

American Airlines predicts a decline in unit revenue of 5.5% to 7.5% in the fourth quarter compared to the previous year, while unit costs (excluding fuel) are expected to rise by 5% to 7%. Capacity is projected to increase by 4.5% to 6.5% from the same period in 2022. The airline reported a loss of $545 million, or 83 cents per share, during the third quarter, marking its first loss since the first quarter of 2022. CEO Robert Isom acknowledged challenges such as higher fuel costs but expressed confidence in the team’s ability to adapt to changing circumstances and achieve success. After adjusting for costs associated with the new labor agreement for pilots, the company reported earnings of $263 million, or 38 cents per share. Revenue showed a slight 0.1% increase compared to the previous year.

(Source: CNBC | Bloomberg)

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