American Airlines Q3 Profit Beats Estimates; Lowers 2023 Earnings Outlook

(RTTNews) - American Airlines Group Inc. (AAL) posted a third-quarter net loss of $545 million compared to net income of $483 million, last year. Loss per share was $0.83 compared to profit of $0.69. The company recognized $808 million of net special items in the third quarter after the effect of taxes, which principally included operating net special items of $983 million related to onetime charges resulting from the ratification of a new collective bargaining agreement with American's mainline pilots. Excluding net special items, American produced an operating margin of 5.4% and net income of $263 million in the third quarter. Adjusted profit per share was $0.38 compared to $0.69, prior year. On average, 16 analysts polled by Thomson Reuters expected the company to report profit per share of $0.25, for the quarter. Analysts' estimates typically exclude special items.

Third-quarter revenues were approximately $13.48 billion, compared to $13.46 billion, previous year. Analysts on average had estimated $13.51 billion in revenue. American operated more than 515,000 flights in the third quarter with an average load factor of 84%.

American reduced total debt by $1.4 billion in the third quarter. The company noted that it is more than 70% of the way to its goal of reducing total debt by $15 billion by the end of 2025. As of Sept. 30, 2023, American had reduced its total debt by approximately $10.9 billion from peak levels in mid-2021. The company ended the quarter with approximately $13.5 billion of total available liquidity.

Looking forward, the company expects fourth-quarter adjusted operating margin to be 2% to 4%. Adjusted earnings per share is projected to be approximately breakeven. The company expects fourth-quarter capacity to be up approximately 4.5% to 6.5%.

American now expects 2023 adjusted operating margin to be approximately 7%. Adjusted earnings per share is anticipated in a range of approximately $2.25-$2.50. The company now expects full-year capacity to be up approximately 6.5% year over year. In July, the company anticipated full-year adjusted earnings per share to be between $3.00 and $3.75.

Shares of American Airlines are up 1% in pre-market trade on Thursday.

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