April 26, 2019, 7:50 a.m. EDT

American Airlines' stock sinks after profit beat expectations, but guidance was lowered

Shares of American Airlines Group Inc. (NAS:AAL) sank 3.2% in premarket trade Friday, after the air carrier reported first-quarter earnings and load factor that beat expectations, but lowered its full-year profit outlook. Regarding the grounding of its 737 MAX fleet, made by Boeing Co. (NYS:BA) , the company said it expects a $350 million negative impact on 2019 earnings, assuming the flight cancellations extend through Aug. 19. For the latest quarter, net income rose to $185 million, or 41 cents a share, from $159 million, or 34 cents a share, in the same period a year ago. Excluding non-recurring items, adjusted EPS was 52 cents, above the FactSet consensus of 50 cents. Total revenue rose 1.8% to $10.58 billion, in line with the FactSet consensus of $10.60 billion. Load factor increased to 82.2% from 80.4%, beating expectations of 80.5%, as traffic growth of 3.5% outpaced capacity growth of 1.3%. Total revenue per available seat mile (TRASM) rose 0.5% to 15.87 cents. American cut its 2019 adjusted EPS guidance range to $4.00 to $6.00 from $5.50 to $7.50. The stock has gained 4.1% year to date through Thursday, while the NYSE Arca Airline Index (1083:XX:XAL) has rallied 11.7% and the S&P 500 (S&P:SPX) has climbed 16.7%.

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