American Airlines raised its second-quarter guidance early Wednesday on strong demand and lower-than-expected fuel costs for the period. AAL stock rose modestly during trading. United Airlines, Delta Airlines and Southwest Airlines pared gains after catching the updraft in premarket trading.
American Airlines updated its forecast, guiding total revenue per available seat mile to be down 1% to 3% compared to Q2 2022. The company previously guided a 2% to 4% decline in revenue per available seat mile.
American Airlines expects the average fuel price per gallon to range from $2.55 to $2.65 for Q2, down from the previous estimate of $2.65 to $2.75. Those cheaper fuel prices should help margins. The Fort Worth, Texas-based airline lifted its adjusted operating margin outlook to range from 12.5% to 14.5% vs. the prior guidance of 11% to 13%.
American Airlines maintained its available seat miles forecast for the quarter, predicting a 3.5% to 5.5% increase in carrying capacity from last year.
American Airlines now expects second-quarter earnings to soar up to 117% year-over-year and hiked its adjusted earnings guidance to range from $1.45 to $1.65 per share. It previously predicted EPS of $1.20-$1.40. The new outlook is well above FactSet forecasts of $1.29 per share.
American Airlines maintained its full-year earnings forecast of $2.50 to $3.50 per share, compared to FactSet estimates of $2.71.
AAL Stock
AAL stock rose 1.1% to 14.78 Wednesday. Shares climbed 2.7% to 15.02 in premarket trading following the guidance update, after bouncing from the 200-day line on Tuesday.
A trendline entry for AAL stock could shape up today, with short-term resistance at 15.08. If American Airlines stock can advance a little further, a consolidation going back to January should take shape with a 17.74 buy point.
American's world-spanning peers United Airlines eased 1.14% during trading after advancing 2% premarket. Delta Airlines inched up 0.2% after rising 1.5% before the opening bell.
UAL stock is in a consolidation with a 55.14 buy point. Investors could use a move above the May 23 high of 49.05 as an early entry.
Delta stock is working on a 40.40 buy point from its own consolidation.
This trio of airline stocks keep trying to gain altitude but have stalled whenever they hit or near entries. AAL stock, Delta and United all tumbled in March after bullish moves to start 2023.
U.S.-centric Southwest Airlines ended Wednesday trading up 0.23%. LUV stock has been trending lower for the past two years, trading below its sliding 50-day and 200-day lines.
