Table of Contents
Table of Contents

American Airlines Beats Revenue and Profit Predictions

But load factor did not meet expectations

Key Takeaways

  • American Airlines' load factor came in below analyst predictions.
  • Load factor measures the percentage of seating capacity being filled by paying passengers. It fell sharply in FY 2020 amid the COVID-19 pandemic and related travel restrictions.
  • Earnings and revenue beat expectations by a wide margin.
American Airlines Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Earnings Per Share Beat $0.69 $0.53
Revenue Beat $13.5B $13.3B
Load Factor Miss 85.3% 86.0%

Source: Predictions based on analysts' consensus from Visible Alpha

American Airlines (AAL) Financial Results: Analysis

American Airlines Group Inc. (AAL), the largest airline in the world by passenger volume, beat analyst predictions for third-quarter profit and revenue on demand for domestic and short-haul international travel and forecast a profit in the year's last three months as travel picks up for the holidays.

American posted earnings per share (EPS) of $0.69, 30% higher than analysts' estimates of $0.53, compared with a third-quarter loss a year ago. Revenue grew more than 50% to a record $13.5 billion, also beating predictions, as passenger sales offset a decline in cargo. American also said it achieved a flight schedule 25% larger than rivals despite hurricanes in Florida and the Caribbean and flooding in Texas.

AAL Load Factor

American Airlines' load factor climbed to 85.3%, falling short of analyst predictions of 86.0% yet still the second-highest since the third quarter of 2019. Load factors are key metrics because the cost of sending an aircraft into flight is relatively the same whether 50 or 100 paying passengers are aboard. That gives airlines an incentive to fill as many seats as possible. Higher load factors mean an airline's fixed costs are spread across a greater number of passengers, making the airline more profitable.

AAL Outlook and Stock Performance

American said that it expects to post a fourth-quarter profit of $0.50 to $0.70 per diluted share excluding special items, as increasing demand is offset by higher fuel costs. It expects revenue to be 11% to 13% higher than the fourth quarter of 2019.

American shares of rose 2.8% as of 7:50 a.m. New York time after the results. The company's stock has dropped by 28.4% in the past year, more than the 18.2% drop in the S&P 500 Index.

American Airlines next earnings report is expected to be released on Jan. 19, 2023.

Article Sources
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  2. Visible Alpha. "Financial Data."

  3. American Airlines Group Inc. "Form 8-K: October 11, 2022," Pages 4-5.

  4. American Airlines Group Inc. "Form 8-K: October 11, 2022," Pages 4-5.

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