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American Airlines has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 23.83%. The Zacks Consensus Estimate for AAL’s fourth-quarter 2023 earnings has been revised upward by more than 100% in the past 60 days.
Given this backdrop, let's delve deeper into the factors that are likely to have influenced AAL’s fourth-quarter 2023 performance.
We expect upbeat air-travel demand, particularly on the domestic front, to have boosted American Airlines’ top-line performance in the to-be-reported quarter. Passenger revenues, which account for the bulk of the top line, are likely to have been high, in turn, strengthening total revenues.
Driven by the uptick, AAL expects adjusted operating margin in the December-end quarter to be 2-4%. The carrier projects total revenue per available seat miles (a measure of unit revenue) 5.5% and 7.5%, lower than fourth-quarter 2022 actuals. System capacity for the to-be-reported quarter is estimated to increase 4.5-6.5% from fourth-quarter 2022 levels.
Driven by upbeat traffic, the load factor (percentage of seats filled by passengers) for December 2023 improved to 79.8% from 77.6% in December 2022.
However, high fuel costs might have affected the bottom-line performance in the quarter under review. Fuel costs per gallon are projected to be in the range of $3.01-$3.11 for the fourth quarter of 2023. Even though fuel prices have come down from the highs witnessed earlier, it still remains elevated.
What Our Model Says
Our proven model predicts an earnings beat for American Airlines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
American Airlines has an Earnings ESP of +43.10% and a Zacks Rank #2.
American Airlines Group Inc. Price and EPS Surprise
American Airlines’ third-quarter 2023 earnings of 38 cents per share beat the Zacks Consensus Estimate of 26 cents. Results were aided by higher revenues driven by the buoyant air-travel-demand scenario. In the year-ago quarter, AAL reported earnings of 69 cents.
Operating revenues of $13,482 million increased marginally year over year. The top line missed the Zacks Consensus Estimate of $13,518.7 million.
Other Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on their fourth-quarter 2023 earnings:
The Zacks Consensus Estimate for CPA’s fourth-quarter 2023 earnings has been revised upward by 5.1% in the past 90 days. CPA delivered a trailing four-quarter earnings surprise of 16.81%, on average.
Shares of CPA have gained 10.2% in the past three months.
Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB - Free Report) , has an Earnings ESP of +0.85% and a Zacks Rank #2. WAB will release results on Feb 14.
WAB has an expected earnings growth rate of 20.77% for fourth-quarter 2023. WAB delivered a trailing four-quarter earnings surprise of 7.11%, on average.
The Zacks Consensus Estimate for WAB’s fourth-quarter 2023 earnings has improved 3.3% over the past 90 days. Shares of WAB have gained 29.6% in the past three months.
Image: Bigstock
Is a Beat in Store for American Airlines (AAL) in Q4 Earnings?
American Airlines Group Inc. (AAL - Free Report) is scheduled to report fourth-quarter 2023 results on Jan 25, before market open.
American Airlines has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 23.83%. The Zacks Consensus Estimate for AAL’s fourth-quarter 2023 earnings has been revised upward by more than 100% in the past 60 days.
Given this backdrop, let's delve deeper into the factors that are likely to have influenced AAL’s fourth-quarter 2023 performance.
We expect upbeat air-travel demand, particularly on the domestic front, to have boosted American Airlines’ top-line performance in the to-be-reported quarter.
Passenger revenues, which account for the bulk of the top line, are likely to have been high, in turn, strengthening total revenues.
Driven by the uptick, AAL expects adjusted operating margin in the December-end quarter to be 2-4%. The carrier projects total revenue per available seat miles (a measure of unit revenue) 5.5% and 7.5%, lower than fourth-quarter 2022 actuals. System capacity for the to-be-reported quarter is estimated to increase 4.5-6.5% from fourth-quarter 2022 levels.
Driven by upbeat traffic, the load factor (percentage of seats filled by passengers) for December 2023 improved to 79.8% from 77.6% in December 2022.
However, high fuel costs might have affected the bottom-line performance in the quarter under review. Fuel costs per gallon are projected to be in the range of $3.01-$3.11 for the fourth quarter of 2023. Even though fuel prices have come down from the highs witnessed earlier, it still remains elevated.
What Our Model Says
Our proven model predicts an earnings beat for American Airlines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
American Airlines has an Earnings ESP of +43.10% and a Zacks Rank #2.
American Airlines Group Inc. Price and EPS Surprise
American Airlines Group Inc. price-eps-surprise | American Airlines Group Inc. Quote
Highlights of Q3
American Airlines’ third-quarter 2023 earnings of 38 cents per share beat the Zacks Consensus Estimate of 26 cents. Results were aided by higher revenues driven by the buoyant air-travel-demand scenario. In the year-ago quarter, AAL reported earnings of 69 cents.
Operating revenues of $13,482 million increased marginally year over year. The top line missed the Zacks Consensus Estimate of $13,518.7 million.
Other Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on their fourth-quarter 2023 earnings:
Copa Holdings, S.A.(CPA - Free Report) has an Earnings ESP of +1.47% and a Zacks Rank #1. CPA will release results on Feb 7.You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CPA’s fourth-quarter 2023 earnings has been revised upward by 5.1% in the past 90 days. CPA delivered a trailing four-quarter earnings surprise of 16.81%, on average.
Shares of CPA have gained 10.2% in the past three months.
Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB - Free Report) , has an Earnings ESP of +0.85% and a Zacks Rank #2. WAB will release results on Feb 14.
WAB has an expected earnings growth rate of 20.77% for fourth-quarter 2023. WAB delivered a trailing four-quarter earnings surprise of 7.11%, on average.
The Zacks Consensus Estimate for WAB’s fourth-quarter 2023 earnings has improved 3.3% over the past 90 days. Shares of WAB have gained 29.6% in the past three months.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.