American Airlines (AAL) earnings preview: Boeing 737 Max groundings might dent Q4 results

American Airlines (NYSE: AAL) is slated to report fourth quarter 2019 earnings results on Thursday, January 23, before the market opens. Analysts expect the company to report earnings of $1.17 per share, up from $1.04 per share reported a year earlier. Revenue is expected to grow 3.5% to $11.3 billion.

The Boeing 737 Max grounding issue will once again be the focus of the fourth quarter earnings report. The quarterly results are likely to be impacted by capacity constraints caused by the groundings. Last week, the company announced that it expects to resume services on the 737 Max aircraft in June.

The results are likely to benefit from lower fuel prices in the quarter. The airline’s topline numbers might benefit from passenger demand in the holiday season. However, weakness in cargo revenue might continue in the fourth quarter as well.

In the third quarter of 2019, American beat earnings estimates while revenues missed the mark. Revenue grew 3% to $11.9 billion while adjusted EPS totaled $1.42.

American expects fourth quarter 2019 TRASM to be flat to up 2% year-over-year. For the full year of 2019, adjusted EPS is expected to be $4.50-5.50.

Shares of American Airlines have fallen 19% in the past one year. The stock has an average price target of $31.89.

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