American Airlines' stock experiences a 10% increase due to robust demand, boosting its 2024 profit forecast.
- In the last three months of 2023, American Airlines made a profit of $19 million.
- The airline beat Wall Street estimates on the top and bottom lines.
- On a busy day for the airline industry, Southwest and Alaska also release their fourth-quarter earnings reports, in addition to the earnings report.
On Thursday, the company posted a $19 million profit for the last three months of 2023, exceeding Wall Street estimates on both the top and bottom lines.
Shares of the company rose more than 10% on Thursday.
In the fourth quarter of 2023, American's performance exceeded Wall Street estimates compiled by LSEG, formerly known as Refinitiv.
- Earnings per share: 29 cents adjusted vs. 10 cents expected.
- Revenue: $13.06 billion vs. $13.02 billion expected.
In the last three months of 2023, American Airlines' net income was $19 million, a 98% decrease from the $803 million earned in the same period the previous year. Additionally, earnings per share decreased to 3 cents from $1.14 in the fourth quarter of 2022.
American Airlines earned 29 cents per share after a new labor agreement with its pilots.
The airline predicted it would achieve a break-even in the December period, as stated in its third-quarter earnings report.
CEO Robert Isom of American Airlines expressed satisfaction with the company's results, stating that they finished the year on a strong note. He emphasized American's focus on reliability, profitability, and strengthening its balance sheet. Isom believes that the first and second quarters will be busy, and now is the ideal time to buy travel. He predicts a busy year ahead.
American anticipates a net loss per share of between 15 cents and 35 cents, adjusted, in the first quarter of 2024. Flying capacity is expected to increase between 6.5% and 8.5%, while costs, excluding fuel, are projected to rise between 2% and 4% for the period.
In 2024, American anticipates its adjusted earnings per share to range from $2.25 to $3.25, with a mid-single digit increase in flying capacity compared to 2023.
All U.S. and Canada-based employees will receive a profit-sharing payment in March, as stated by Isom in a letter to American team members.
On a busy day for the airline industry, with both Delta and United Airlines reporting fourth-quarter earnings on Thursday, American Airlines posted higher-than-expected earnings and revenue and a sunny forecast for 2024.
Despite facing challenging winter weather in the first weeks of January, American Airlines reported its best-ever on-time departures during the December holidays.
The Federal Aviation Administration grounded the 737 Max 9 plane after an Alaska Airlines midflight incident, and industry experts have been closely monitoring the situation.
While American does not possess any of those planes in its fleet, it does have the more common 737 Max 8, with 20 more planned for this year, according to Isom. However, on Wednesday, the FAA announced that it would stop Boeing from increasing 737 Max production, which may affect future aircraft deliveries.
CEO Isom stated on an earnings call Thursday that Boeing must address the unacceptable issues they have been facing for years.
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