New York (AFP) – Shares of American Airlines plunged Thursday after the carrier released a disappointing 2025 profit outlook even as its earnings topped expectations in the most recent quarter. American executives forecast a loss of as much as 40 cents per share in the first quarter of 2025 as the company works through the low-demand months of January and February and digests elevated costs from recent contract agreements with labor unions.
But American expressed a bullish outlook about demand for periods later in the year. Chief Executive Officer Robert Isom predicted “continued strength domestically” and said the strong US dollar should boost traffic to Europe this summer. “As we look to some of our peak periods, spring break and getting into summer, I see robust demand across the board,” Isom said during a conference call with analysts.
American overall reported fourth-quarter profits of $590 million, much above the $19 million in the year-earlier period. Revenues rose 4.6 percent to $13.7 billion. But American forecast a far bigger first-quarter loss than analysts expected. The company also estimated full-year earnings of between $1.70 and $2.70 per share, below the analyst average of $3.02.
During the conference call, American touted the benefits of a new credit card agreement with Citi and said efforts were on track to restore business with corporate clients who fled a poorly-executed company shift to direct bookings. The company also touted its progress in paying down debt, noting it has reduced payments by more than $15 billion from 2021 when its level was much above its rivals.
American shares fell 9.3 percent in morning trading.
© 2024 AFP
