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American Airlines Misses on Q4 Earnings & Revenues, Expects Loss in Q1
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Key Takeaways
AAL missed Q4 estimates, reporting EPS of $0.16 and $14B in revenues.
Winter Storm Fern is expected to cut Q1 revenues by up to $200M and increase non-fuel unit costs.
AAL forecasts a Q1 loss of $0.10-$0.50 per share and FY26 EPS between $1.70 and $2.70.
American Airlines’ (AAL - Free Report) fourth-quarter 2025 earnings (excluding 1 cent from non-recurring items) of 16 cents per share missed the Zacks Consensus Estimate of 38 cents. In the year-ago quarter, AAL reported earnings per share of 86 cents. Operating revenues of $14 billion missed the Zacks Consensus Estimate of $14.1 billion and increased 2.5% from the year-ago number. The prolonged government shutdown hurt fourth-quarter revenues by approximately $325 million.
Passenger revenues, accounting for 90.4% of the top line, increased 2.1% year over year to $12.7 billion. The figure was just short of our estimate of $12.8 billion. Cargo revenues increased 2.8% to $226 million. The metric lagged our estimate of $233 million. Other revenues increased 7.4% to $1.1 billion, in line with our expectations.
American Airlines Price, Consensus and EPS Surprise
Total revenue per available seat miles (a key measure of unit revenues) decreased to 18.8 cents from 19.1 cents recorded a year ago. Passenger revenue per available seat miles decreased 2% to 17 cents. Moreover, the figure was lower than our expectation of 17.17 cents. Consolidated yield inched up 0.5% to 20.55 cents, surpassing our estimate of 20.15 cents.
Consolidated traffic (measured in revenue passenger miles) inched up 1.5% year over year. Capacity (measured in average seat miles) expanded 4.2%. Consolidated load factor (percentage of seats filled by passengers) decreased 2.2 points to 82.7%. The figure for the load factor was lower than our expectation of 85.2%.
Total operating costs (on a reported basis) jumped 8.2% year over year to $13.5 billion, with expenses on salaries, wages and benefits growing 9.7% to $4.5 billion. The labor deal, inked with its pilots in 2023, contributed to this increase. Expenses on aircraft fuel and taxes increased 8% to $2.7 billion. Average fuel price per gallon (including related taxes) increased to $2.42 from $2.34 a year ago.
Consolidated operating costs per available seat mile (excluding fuel and special items) increased 3.7% to 14.51 cents. The actual figure was more than our estimate of 14.39 cents. Fuel gallon consumption increased 4.1% to $1.11 billion in the fourth quarter of 2025.
American Airlines, currently carrying a Zacks Rank #3 (Hold), exited the quarter with $9.2 billion of total available liquidity.
The guidance indicates AAL’s preliminary estimate of the impact from the ongoing Winter Storm Fern. The storm has so far resulted in the cancellation of more than 9,000 flights. As a result, the company’s first-quarter 2026 guidance includes an approximately 1.5-point reduction to capacity, an estimated negative revenue impact of $150-$200 million and around a 1.5-point increase in non-fuel unit costs.
Management expects capacity in the first quarter of 2026 to be up 3-5% from first-quarter 2025 actuals. Total revenues are likely to be up in the 7-10% band from year-ago levels. Cost per available seat miles (adjusted) in the March quarter is expected to increase in the 3-5% range from first-quarter 2025 actuals. American Airlines expects a loss per share of 10 cents to 50 cents in the first quarter, hurt by high costs and the weather impact. The Zacks Consensus Estimate is pegged at a loss of 28 cents per share.
For full-year 2026, AAL expects earnings per share in the $1.7-$2.7 range. The Zacks Consensus Estimate for earnings is pegged at $2.01 per share, below the mid-point of the guided range. The effective tax rate for the full-year 2026 is expected to be 25%. AAL expects free cash flow for 2026 to exceed $2 billion. AAL expects the 2026 adjusted nonoperating expense to be approximately $1.25 billion.
Q4 Performances of Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported fourth-quarter 2025 earnings (excluding 31 cents from non-recurring items) of $1.55 per share, which beat the Zacks Consensus Estimate of $1.53. Earnings decreased 16.22% on a year-over-year basis due to high labor costs.
Revenues in the December-end quarter were $16 billion, beating the Zacks Consensus Estimate of $15.63 billion and increasing 2.9% on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1.2% year over year to $14.6 billion. Revenue growth was impacted by about 2 points due to the government shutdown, mainly in the domestic segment, consistent with the company's disclosure last month.
J.B. Hunt Transport Services (JBHT - Free Report) reported fourth-quarter 2025 earnings of $1.90 per share, which surpassed the Zacks Consensus Estimate of $1.81 and improved 24.2% year over year.
Total operating revenues of $3.09 billion fell short of the Zacks Consensus Estimate of $3.12 billion and decreased 1.6% year over year. JBHT’s fourth-quarter top-line performance was hurt by a 2% decrease and a 4% decline in revenue per load excluding fuel surcharge revenues in Intermodal (“JBI”) and Truckload (“JBT”).
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American Airlines Misses on Q4 Earnings & Revenues, Expects Loss in Q1
Key Takeaways
American Airlines’ (AAL - Free Report) fourth-quarter 2025 earnings (excluding 1 cent from non-recurring items) of 16 cents per share missed the Zacks Consensus Estimate of 38 cents. In the year-ago quarter, AAL reported earnings per share of 86 cents. Operating revenues of $14 billion missed the Zacks Consensus Estimate of $14.1 billion and increased 2.5% from the year-ago number. The prolonged government shutdown hurt fourth-quarter revenues by approximately $325 million.
Passenger revenues, accounting for 90.4% of the top line, increased 2.1% year over year to $12.7 billion. The figure was just short of our estimate of $12.8 billion. Cargo revenues increased 2.8% to $226 million. The metric lagged our estimate of $233 million. Other revenues increased 7.4% to $1.1 billion, in line with our expectations.
American Airlines Price, Consensus and EPS Surprise
American Airlines price-consensus-eps-surprise-chart | American Airlines Quote
Total revenue per available seat miles (a key measure of unit revenues) decreased to 18.8 cents from 19.1 cents recorded a year ago. Passenger revenue per available seat miles decreased 2% to 17 cents. Moreover, the figure was lower than our expectation of 17.17 cents. Consolidated yield inched up 0.5% to 20.55 cents, surpassing our estimate of 20.15 cents.
Consolidated traffic (measured in revenue passenger miles) inched up 1.5% year over year. Capacity (measured in average seat miles) expanded 4.2%. Consolidated load factor (percentage of seats filled by passengers) decreased 2.2 points to 82.7%. The figure for the load factor was lower than our expectation of 85.2%.
Total operating costs (on a reported basis) jumped 8.2% year over year to $13.5 billion, with expenses on salaries, wages and benefits growing 9.7% to $4.5 billion. The labor deal, inked with its pilots in 2023, contributed to this increase. Expenses on aircraft fuel and taxes increased 8% to $2.7 billion. Average fuel price per gallon (including related taxes) increased to $2.42 from $2.34 a year ago.
Consolidated operating costs per available seat mile (excluding fuel and special items) increased 3.7% to 14.51 cents. The actual figure was more than our estimate of 14.39 cents. Fuel gallon consumption increased 4.1% to $1.11 billion in the fourth quarter of 2025.
American Airlines, currently carrying a Zacks Rank #3 (Hold), exited the quarter with $9.2 billion of total available liquidity.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AAL’s Q1 Likely to Be Hurt by Winter Storm
The guidance indicates AAL’s preliminary estimate of the impact from the ongoing Winter Storm Fern. The storm has so far resulted in the cancellation of more than 9,000 flights. As a result, the company’s first-quarter 2026 guidance includes an approximately 1.5-point reduction to capacity, an estimated negative revenue impact of $150-$200 million and around a 1.5-point increase in non-fuel unit costs.
Management expects capacity in the first quarter of 2026 to be up 3-5% from first-quarter 2025 actuals. Total revenues are likely to be up in the 7-10% band from year-ago levels. Cost per available seat miles (adjusted) in the March quarter is expected to increase in the 3-5% range from first-quarter 2025 actuals. American Airlines expects a loss per share of 10 cents to 50 cents in the first quarter, hurt by high costs and the weather impact. The Zacks Consensus Estimate is pegged at a loss of 28 cents per share.
For full-year 2026, AAL expects earnings per share in the $1.7-$2.7 range. The Zacks Consensus Estimate for earnings is pegged at $2.01 per share, below the mid-point of the guided range. The effective tax rate for the full-year 2026 is expected to be 25%. AAL expects free cash flow for 2026 to exceed $2 billion. AAL expects the 2026 adjusted nonoperating expense to be approximately $1.25 billion.
Q4 Performances of Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported fourth-quarter 2025 earnings (excluding 31 cents from non-recurring items) of $1.55 per share, which beat the Zacks Consensus Estimate of $1.53. Earnings decreased 16.22% on a year-over-year basis due to high labor costs.
Revenues in the December-end quarter were $16 billion, beating the Zacks Consensus Estimate of $15.63 billion and increasing 2.9% on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1.2% year over year to $14.6 billion. Revenue growth was impacted by about 2 points due to the government shutdown, mainly in the domestic segment, consistent with the company's disclosure last month.
J.B. Hunt Transport Services (JBHT - Free Report) reported fourth-quarter 2025 earnings of $1.90 per share, which surpassed the Zacks Consensus Estimate of $1.81 and improved 24.2% year over year.
Total operating revenues of $3.09 billion fell short of the Zacks Consensus Estimate of $3.12 billion and decreased 1.6% year over year. JBHT’s fourth-quarter top-line performance was hurt by a 2% decrease and a 4% decline in revenue per load excluding fuel surcharge revenues in Intermodal (“JBI”) and Truckload (“JBT”).