American Airlines (AAL) -) posted stronger-than-expected second quarter earnings Thursday, while lifting its full-year profit guidance, as U.S. carriers continue to benefit from an ongoing travel boom.
Shares in the group traded firmly lower, however, as investors looked to weakening pricing power over the back half of the year amid a planned boost in overall capacity.
American said its adjusted profit for the three months ending in June was $1.92 per share, up 152% over the same period last year well ahead of the Street consensus forecast of $1.59 per share. Group revenues were pegged 4.5% higher at $14.06 billion and also topped analysts' estimates of a $13.74 billion tally.
Looking into the current quarter, American said it expects revenues to rise by between 4% and 6.5%, with earnings in the region of 85 cents to 95 cents per share. For the full year, American boosted its overall profit forecast to between $3.00 and $3.75 per share, up from its prior forecast of $2.50 to $3.50 per share.
The Transportation Security Administration said earlier this month that its screened more than 11.3 million passengers over the five-day period that ended on July 5, a level that represents around 93% of the volumes recorded over the same period in 2019.
The recent seven-day average, in fact, shows total TSA traveler throughput running 0.7% ahead of 2019 levels.
"It was another fantastic quarter for American, driven by the hard work of our team to deliver a reliable operation for our customers and the continued strong demand for our product,” said CEO Robert Isom. “Our operation is performing at historically strong levels, and we have worked to refresh our fleet and build a comprehensive global network, all of which helped to produce record revenues in the second quarter."
"We will build on this momentum the rest of the year and continue to prioritize reliability, profitability, accountability and strengthening our balance sheet," he added.
American Airlines shares were marked 5.5% lower in mid-day trading immediately following the earnings release to change hands at $17.57 each.
Last night, American's larger rival, United Airlines (UAL) -), said adjusted earnings for the three months ending in June came in at a record $5.03 per share with group revenues of $14.2 billion.
United also boosted its full-year profit forecast by $1, to between $11 and $12 per share, with third quarter revenue growth of between 10% and 13%.
United Airlines shares were marked 4.1% higher at $56.98 each.
Delta Air Lines (DAL) -) also posted better-than-expected second quarter earnings last week, and also lifted its full-year profit forecast, as the ongoing boom in travel demand, alongside lower fuel costs, helped boost the carriers overall bottom line.
