What to expect when American Airlines (AAL) reports Q2 2024 earnings results

Shares of American Airlines Group (NASDAQ: AAL) were down over 1% on Thursday. The stock has dropped 22% over the past three months. The airline is scheduled to report its second quarter 2024 earnings results on Thursday, July 25, before markets open. Here’s a look at what to expect from the earnings report:

Revenue

Analysts are projecting revenue of $14.4 billion for American Airlines in Q2 2024, which would represent a growth of 2% over the same period a year ago. In the first quarter of 2024, operating revenues increased 3% year-over-year to $12.6 billion.

Earnings

American Airlines has guided for adjusted EPS of $1.00-1.15 in Q2 2024. Analysts are predicting EPS of $1.06. This compares to adjusted EPS of $1.92 reported in Q2 2023. In Q1 2024, the company reported an adjusted loss of $0.34 per share.

Points to note

American Airlines expects its total revenue per available seat mile (TRASM) to decrease 5-6% year-over-year in Q2 2024. In Q1 2024, TRASM decreased by nearly 5% YoY. The company expects its capacity to increase 7-9% in Q2.

Last quarter, the top line benefited from a recovery in business travel. In addition, strength in premium content and AAdvantage customers also benefited the company’s results. In Q1, premium content comprised 61% of total revenue and grew 17% YoY. AAdvantage customers account for 72% of premium content revenue. The airline continues to invest in its premium customer experience.

American expects adjusted operating margin to range between 8.5-10.5% in Q2. Last quarter, adjusted operating margin was 0.6%.

Cost per available seat mile, excluding fuel and special items, or CASM-ex, is expected to be flat to up 1% YoY in Q2. Average fuel price per gallon is expected to be $2.70-2.80. In Q1, CASM-ex was up 2.3%.