Key Takeaways
- Shares of AAL declined approximately 8% following the airline’s decision to lower its 2026 full-year profit forecast amid escalating jet fuel expenses.
- Revised 2026 guidance: adjusted earnings per share between a 65-cent loss and a 65-cent gain, compared to previous expectations of -40 cents to +$1.10.
- Second-quarter adjusted earnings reached 15 cents per share, surpassing analyst projections of 3 cents; total revenue climbed 16% to $16.74 billion.
- Third-quarter forecast anticipates losses ranging from 70 cents to 10 cents per share, significantly below the consensus estimate of a 26-cent profit.
- Chief Executive Robert Isom recognized ongoing challenges while emphasizing real progress, including plans to acquire new wide-body jets and expand premium seating capacity.
Shares of American Airlines (AAL) tumbled approximately 8% during Thursday’s trading session after the carrier significantly reduced its 2026 full-year earnings forecast, despite delivering quarterly results that exceeded Wall Street’s expectations. The stock retreated to approximately $14.24 in pre-market activity, extending its distance from the 50-day moving average.
American Airlines Group Inc., AAL
The carrier reported second-quarter adjusted earnings of 15 cents per share, comfortably surpassing the Street’s 3-cent consensus forecast. Total revenue advanced 16.3% from the prior year to reach $16.74 billion, slightly exceeding analyst estimates of $16.71 billion.
However, it was the forward-looking guidance that rattled market participants.
The airline now projects full-year 2026 adjusted earnings per share ranging from a 65-cent loss to a 65-cent profit. This represents a significant downward revision from the April projection of a 40-cent loss to a $1.10 gain.
Surging jet fuel prices represent the primary driver behind the guidance cut. Aviation fuel constitutes the carrier’s second-largest expense category after personnel costs, and this year’s price spike has proven difficult to offset completely despite elevated ticket pricing.
Looking toward the third quarter, American anticipates losses between 70 cents and 10 cents per share. Analysts had been modeling a 26-cent profit. Revenue is projected to increase 16% to 19%, which actually exceeds the Street’s 16.6% growth expectation.
Profitability Gap With Industry Leaders Expands
Chief Executive Robert Isom acknowledged last month that American is working to narrow its profitability margin disadvantage versus Delta and United ā though that differential has actually widened recently. He provided no specific timeframe for achieving parity with competitors.
Regarding capacity expansion, American intends to increase available seat miles by as much as 5% during the third quarter.
Isom revealed the company plans to place orders for new wide-body aircraft before year-end and upgrade existing planes with additional high-yield premium seating. “While there’s still work ahead, the progress we’re making is real,” he stated in a Thursday memo to employees.
Bottom Line Dropped 88% From Prior Year
Notwithstanding the revenue outperformance, American’s net earnings plummeted 88% year-over-year ā declining from $599 million, or 91 cents per share, to merely $71 million, or 11 cents per share.
Passenger revenue per available seat mile ā an important indicator of pricing strength ā advanced 10% compared to the prior year, demonstrating that customer demand remains resilient despite rising operational expenses.
The full-year 2026 Wall Street consensus had previously stood at 61 cents in earnings. American’s updated guidance midpoint now registers at breakeven.
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