American Airlines (AAL) Second Quarter 2024 Results

American Airlines Shares fell more than 5% in premarket trading Thursday after the airline cut its profit forecast for the year following a failed sales strategy and an industry-wide glut of flights that has forced airlines to discount seats.

American said it expects to earn an adjusted 70 cents to $1.30 a share this year, well below the $2.25 to $3.25 a share it forecast in April and below the $1.10 to $2.60 a share Wall Street analysts had expected, according to LSEG.

The Fort Worth, Texas-based airline also estimated that its unit revenue would fall as much as 4.5% in the third quarter as high travel demand failed to offset a glut of flights.

The airline has been trying to undo policies from a direct-to-consumer sales strategy it adopted that failed to deliver results. In an earnings release on Thursday, it said it had “taken swift and aggressive action to refocus its sales and distribution strategy” after complaints from travel agents and customers.

“American has a fleet, network and product designed to deliver results, but during the second quarter we fell short of our initial expectations due to our previous sales and distribution strategy and an imbalance between domestic supply and demand,” American CEO Robert Isom said in a news release.

Here's how American performed in the second quarter compared with Wall Street estimates compiled by LSEG:

• Earnings per share: $1.09 adjusted vs. $1.05 expected
• Revenue: $14.33 billion versus $14.36 billion forecast

Southwest's profit fell 46% in the second quarter to $717 million, or $1.01 per share, although revenue rose 2% to $14.33 billion.

Adjusting for non-recurring items, the airline reported earnings of $1.09 per share.

American's results come later Southwest Airlines It also reported a 46% drop in quarterly profit and said it is taking “urgent” steps to boost revenue.

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