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American Airlines' (AAL) Shares Decline on Q1 TRASM View Cut
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American Airlines Group Inc. (AAL - Free Report) has provided a bleak guidance for first-quarter 2019 unit revenues and pre-tax margin. Consequently, shares of the company declined 1.7% at the close of business on Apr 9.
The company now anticipates first-quarter total revenue per available seat mile (TRASM) to either remain flat or increase up to 1% year over year. The previous view had expected the metric to improve 0-2% on a year-over-year basis. The downside can be attributed to the effects of the government shutdown, the grounding of its MAX fleet and removal of 14 737-800 aircraft from service. While the MAX 8 groundings caused 1,200 flight cancellations in the first quarter, the sudden removal of 14 737-800 aircraft from its fleet led to another 940 flight cancellations.
Additionally, pre-tax margin, excluding special items, is estimated to be 2-% and 4% in the first quarter compared with 2.5-4.5% expected earlier. The lowered guidance is primarily due to increased fuel prices, which are expected to be in the band of $2.02-$2.07 per gallon. Previously, fuel prices were forecasted in the $1.97-$2.02 range.
Meanwhile, the company has trimmed its non-fuel unit cost guidance owing to lower-than-expected salaries and benefits expense. Cost per available seat mile, excluding fuel and special items, is now anticipated to rise in the 2-4% range compared with an increase of 3-5% projected earlier.
Shares of Swire Pacific, Azul and LATAM Airlines have rallied 18.7%, 35.2% and 18.2%, respectively, in the past six months.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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American Airlines' (AAL) Shares Decline on Q1 TRASM View Cut
American Airlines Group Inc. (AAL - Free Report) has provided a bleak guidance for first-quarter 2019 unit revenues and pre-tax margin. Consequently, shares of the company declined 1.7% at the close of business on Apr 9.
The company now anticipates first-quarter total revenue per available seat mile (TRASM) to either remain flat or increase up to 1% year over year. The previous view had expected the metric to improve 0-2% on a year-over-year basis. The downside can be attributed to the effects of the government shutdown, the grounding of its MAX fleet and removal of 14 737-800 aircraft from service. While the MAX 8 groundings caused 1,200 flight cancellations in the first quarter, the sudden removal of 14 737-800 aircraft from its fleet led to another 940 flight cancellations.
Additionally, pre-tax margin, excluding special items, is estimated to be 2-% and 4% in the first quarter compared with 2.5-4.5% expected earlier. The lowered guidance is primarily due to increased fuel prices, which are expected to be in the band of $2.02-$2.07 per gallon. Previously, fuel prices were forecasted in the $1.97-$2.02 range.
Meanwhile, the company has trimmed its non-fuel unit cost guidance owing to lower-than-expected salaries and benefits expense. Cost per available seat mile, excluding fuel and special items, is now anticipated to rise in the 2-4% range compared with an increase of 3-5% projected earlier.
American Airlines Group Inc. Price
American Airlines Group Inc. Price | American Airlines Group Inc. Quote
Zacks Rank & Stocks to Consider
American Airlines carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the same space are Swire Pacific Ltd. (SWRAY - Free Report) , Azul (AZUL - Free Report) and LATAM Airlines Group . While Swire Pacific sports a Zacks Rank #1 (Strong Buy), Azul and LATAM Airlines carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Swire Pacific, Azul and LATAM Airlines have rallied 18.7%, 35.2% and 18.2%, respectively, in the past six months.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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