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American Airlines Group, Inc. reported its first quarter 2024 financial results today with a net loss of $312 million, or ($0.48) per share. First-quarter revenues set a record for the carrier at $12.57 billion, up 3.1% year-over-year, and the company generated a free cash flow of $1.4 billion in the first quarter. American reduced total debt by nearly $950 million in the first quarter, reaching 80% of the 2025 total debt reduction goal. This compares with a profit of $10 million, or $0.02 per share, during the first quarter of 2023.
American’s CEO Robert Isom stated, “While we aren’t satisfied with our first-quarter financial results, we have a strong foundation in place, and we remain on track to deliver on our full-year financial targets. Our team is running a fantastic operation, driving revenue through our commercial initiatives, efficiently managing costs, and producing free cash flow to further strengthen our balance sheet.”
American has been impacted by the Boeing crisis, and will not receive seven planned new aircraft, but does not expect a material impact from the delays. American, like other carriers, is looking for Boeing to ‘get its act together and deliver.’
Forward guidance provided by the carrier is strong. American expects second quarter capacity to be up 7% to 9% and unit revenues to fall in the 1% to 3% range year over year. American is more optimistic in its estimates for the second quarter, guiding earnings per share of $1.15 to $1.45, higher than Wall Street’s current estimates of $1.18. The company also reiterated full-year guidance between $2.25 and $3.25 in earnings per share.
The Bottom Line
The airline industry is returning to normalcy, at least in the US, and traditional seasonality. The first and fourth quarters are the poorest performing, with the second and third quarters the most profitable. We are seeing that pattern again with several carriers, including American.
With strong second-quarter guidance, American looks well-positioned to deliver on its full-year target earnings.
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