American Airlines Group Inc. /zigman2/quotes/209207041/composite AAL -6.66% reported Thursday a second-quarter profit and load factor that beat expectations, while sales rose in line with forecasts. The stock dropped 2.1% in premarket trading. Net income rose to $662 million, or $1.49 a share, from $556 million, or $1.20 a share, in the same period a year ago. Excluding non-recurring items, adjusted EPS rose to $1.82 from $1.66 and beat the FactSet consensus of $1.79. Revenue rose 2.7% to $11.96 billion to match the FactSet consensus of $11.96 billion, as passenger revenue rose 3.2%, cargo revenue dropped 15.4% and other revenue grew 2.9%. Load factor improved to 86.6% from 83.4%, to beat expectations of 84.5%, as traffic increased 3.1% and capacity declined 0.8%. Passenger revenue per available seat mile (PRASM) increased 4% to 15.22 cents, and cost per available seat mile (CASM) rose 2.4% to 14.94 cents. The company said it estimates 737 Max aircraft cancellations will reduce earnings by $175 million in the second quarter, and by $400 million for the year. The company raised its 2019 adjusted EPS guidance range to $4.50 to $6.00 from $4.00 to $6.00. The stock has gained 7.7% year to date through Wednesday, while the NYSE Arca Airline Index /zigman2/quotes/210598447/delayed XX:XAL -2.99% has soared 21.1% and the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.51% has climbed 20.5%.
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Airline stocks dragged down as Boeing 737 Max groundings sully earnings reports