All major airline stocks took a beating on Thursday, with American Airlines (AAL) being the worst hit. The stock tumbled over 8% during intra-day trading after cutting its profit estimate for the fiscal year 2018.
The company lowered its profit estimate for the full year to $4.40- $4.60 per share, from the earlier projected range of $4.50-$5 per share.
Revenue per available seat mile, an important metric in the airline industry, rose 1.5% year-over-year. This represents the lower end of the earlier projected range of 1.5% to 3.5%.
AAL shares have plunged 41% in the trailing 52 weeks. This puts a lot of pressure on CEO Doug Parker ahead of the fourth quarter results, scheduled to be published on January 24.
Reverberations of the estimate slash was felt throughout the industry on Thursday, with United Airlines (UAL) falling 4%, Delta Air Lines (DAL) edging down 0.3% and Southwest (LUV) declining over 1%.
Airline stocks have largely lagged benchmarks last year due to an increase in fuel prices. However, with a decline in fuel price towards the end of the year, investors were hoping that carriers would effectively use this to their advantage in a seasonally strong holiday quarter.
The initial signs were positive. Traffic during the Thanksgiving weekend peaked, bucking fears of prolonged slowness in the airline sector. Delta Air Lines (DAL), meanwhile, said a record number of passengers – 2.3 million – used its services from November 21 to November 25.
Separately, Alaska Air Group (AAL) raised its RASM guidance for the fourth quarter to 12.60 – 12.80 cents from the earlier projection of 12.40-12.60 cents.
However, as it turns out, some airline companies apparently gave out higher discounts to beat rivals than they should have.
Delta Air Lines and United Airlines are both scheduled to report earnings on Tuesday, January 15.
Listen to publicly listed companies’ earnings conference calls along with the edited closed caption text
Most Popular
Intensity Therapeutics is establishing a new field of localized cancer reduction: CEO
Intensity Therapeutics, Inc. (NASDAQ: INTS) is a clinical biotechnology company engaged in the discovery development, and commercialization of first-in-class cancer drugs that attenuate tumors with minimal side effects while training
INTU Earnings: Intuit Q1 2025 adj. profit rises on higher revenues
Financial technology company Intuit Inc. (NASDAQ: INTU) Thursday announced results for the first quarter of 2025, reporting a modest increase in adjusted earnings. The Mountain View-headquartered company’s first-quarter revenue came
Riding the AI wave, Nvidia looks set to stay on the high-growth path
After delivering strong results for the third quarter, Nvidia Corporation (NASDAQ: NVDA) this week said the launch of its new-generation Blackwell chip is on track. The company is thriving on
