American Airlines announced on Thursday that it expects full-year 2025 earnings to range from an adjusted loss of $0.20 per share to a profit of up to $0.80, with a midpoint of $0.30.
This new outlook falls significantly short of the $0.72 annual profit anticipated by analysts.
The company had previously withdrawn its annual guidance in April, citing uncertainty in the operating environment.
Shares of American fell by as much as 7.1% in premarket trading following the announcement, reflecting investor disappointment with the revised outlook.
American Airlines stock has had a tough year with the stock falling by 27% in the year.
While the airline’s projections offer a wide range, executives said the company could reach the top end of its forecast if the domestic market continues to recover.
However, July has proven challenging, with CEO Robert Isom citing weakness in domestic consumer demand during an interview with CNBC.
Domestic exposure highlights vulnerability
American Airlines, which carries more domestic passengers than United Airlines or Delta Air Lines, remains particularly sensitive to fluctuations in US travel demand and pricing trends.
This exposure has made the carrier more vulnerable to the early-year weakness in consumer sentiment and shifting travel behaviors.
The airline industry has faced persistent challenges this summer, including the need to discount fares in order to fill seats.
As capacity has outpaced demand, pricing pressure has intensified.
Americans’ domestic market focus, once a strength, has now become a point of strain as travelers prove less resilient than expected amid inflation and economic uncertainty.
Meanwhile, rivals United and Delta have issued more optimistic projections for the remainder of the year, suggesting divergent paths among the major US carriers.
Both competitors cited recovering corporate and consumer travel, brushing aside geopolitical risks and macroeconomic pressures such as potential tariffs and airport disruptions.
Q2 results beat expectations despite headwinds
Despite the gloomy outlook for the full year, American delivered a better-than-expected performance for the second quarter.
The airline posted an adjusted profit of $0.95 per share, exceeding analysts’ consensus estimate of $0.75 per share.
Revenue also came in stronger than anticipated at $14.4 billion.
Nonetheless, the company indicated that it expects a “well beyond” anticipated loss in the third quarter, suggesting that the short-term challenges are not yet behind it.
The carrier continues to believe that the overall supply-demand balance will shift in its favor through the remainder of the year.
However, analysts and investors will be closely watching whether American can capitalize on any rebound in domestic travel, especially as pricing power remains constrained and competitive pressures persist.
While American’s quarterly results offered some cause for optimism, the lowered annual forecast has tempered investor sentiment and raised fresh questions about the carrier’s ability to navigate a complex operating environment dominated by uneven demand and intensified competition.
The post American Airlines shares plunge 7% after reinstated earnings guidance disappoints appeared first on Invezz
