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  • American Airlines' stock took a hit after the company projected a first-quarter loss significantly larger than analysts anticipated, causing shares to fall nearly 9%. This gloomy outlook contrasts with the more optimistic forecasts from competitors United and Delta, who both predict a profitable start to the year. However, despite the anticipated first-quarter loss, American Airlines maintains a positive outlook for the full year, with earnings projections falling in line with analyst estimates.  
  • The company attributes the projected loss to several factors, including lower capacity due to a decrease in flying and an increased reliance on smaller, regional jets, as well as higher costs associated with new labor agreements finalized last year. Despite these challenges, American Airlines reported a strong fourth quarter, exceeding both earnings and revenue expectations. This positive performance was driven by increased travel demand, both domestically and internationally, with a notable surge in trans-Pacific flights. Additionally, revenue from the company's credit card partnerships with Citi and Barclays saw significant growth.

Why it matters

The company anticipates revenue growth in the first quarter and projects a significant increase for the full year compared to 2024. This suggests that while the first quarter may present challenges, American Airlines remains optimistic about its overall performance in the coming year.

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