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Against this backdrop, let’s delve into the factors that might have impacted the company’s performance in the March quarter.
With coronavirus woes crippling air-travel demand, American Airlines’ first-quarter performance is likely to have taken a major hit. Even though passenger traffic might have been strong in January and February, air-travel demand started waning from March onward ever since the infection was declared a pandemic by the World Health Organization. This downside is expected to have weighed on American Airlines’ top line in the to-be-reported quarter.
To mitigate the extremely low-demand scenario with many countries on lockdown and wide-spread travel restrictions in place, this Fort Worth, TX- based carrier is trimming its capacity, inducing cancellation of multiple flights.
With traffic declining at a faster pace than capacity, consolidated passenger load factor (% of seats filled by passengers) is likely to have fallen in the to-be-reported quarter. Consequently, the Zacks Consensus Estimate for American Airlines’ first-quarter passenger load factor stands at 80, indicating a 4.8% decline from the figure reported in fourth-quarter 2019. Also, the Zacks Consensus Estimate for first-quarter passenger revenue per available seat miles (a measure of unit revenues) stands at 13.53 cents, implying an 8.1% fall from the figure reported in the sequential quarter. However, low fuel costs are likely to have supported the bottomline in the to-be-reported quarter. Evidently, the Zacks Consensus Estimate for March quarter’s average fuel price is pegged at $1.87 per gallon, indicating an 8.8% decline from the number reported in fourth-quarter 2019.
Trend in Estimate Revision
The Zacks Consensus Estimate for first-quarter bottom line currently stands at a loss of $2.04. Meanwhile, earnings figure of 52 cents per share were reported in the year-ago quarter. The Zacks Consensus Estimate for first-quarter sales is currently pegged at $9.33 billion, suggesting an 11.9% decrease from the year-ago reported figure. With the coronavirus outbreak dealing a severe blow to the company, estimates for first-quarter bottom line have moved south from earnings of 43 cents to the current loss projection over the past 60 days.
Earnings Whispers
The proven Zacks model predicts a beat for American Airlines this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of beating estimates. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: American Airlines has an Earnings ESP of +4.07%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American Airlines currently carries a Zacks Rank #3.
Highlights of Q4 Earnings
American Airlines’ earnings (excluding 20 cents from non-recurring items) of $1.15 per share matched the Zacks Consensus Estimate. However, the bottom line improved 10.6% on a year-over-year basis, backed by low fuel costs. Operating revenues of $11,313 million increased 3.4% year over year and also marginally beat the Zacks Consensus Estimate of $11,308.3 million. Higher passenger revenues drove the top line.
Other Stocks to Consider
Here are a few other stocks worth considering from the broader Zacks Transportation sector as our model shows that these too have the right combination of elements to beat on earnings this reporting cycle.
Southwest Airlines (LUV - Free Report) has an Earnings ESP of +22.00% and a Zacks Rank of 3. The carrier is scheduled to report first-quarter 2020 earnings on Apr 28.
Trinity Industries (TRN - Free Report) has an Earnings ESP of +7.14% and is Zacks #3 Ranked. The company is scheduled to report first-quarter 2020 earnings on Apr 29.
Norfolk Southern Corporation (NSC - Free Report) has an Earnings ESP of +0.02% and is#3 Ranked. The company is scheduled to report first-quarter 2020 earnings on Apr 29.
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It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
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Image: Bigstock
How Will American Airlines (AAL) Fare This Earnings Season?
American Airlines (AAL - Free Report) is scheduled to report first-quarter 2020 results on Apr 30, before market open.
Notably, the company’s bottom line surpassed estimates in three of the last four quarters with in-line earnings in one.
American Airlines Group Inc. Price and EPS Surprise
American Airlines Group Inc. price-eps-surprise | American Airlines Group Inc. Quote
Against this backdrop, let’s delve into the factors that might have impacted the company’s performance in the March quarter.
With coronavirus woes crippling air-travel demand, American Airlines’ first-quarter performance is likely to have taken a major hit. Even though passenger traffic might have been strong in January and February, air-travel demand started waning from March onward ever since the infection was declared a pandemic by the World Health Organization. This downside is expected to have weighed on American Airlines’ top line in the to-be-reported quarter.
To mitigate the extremely low-demand scenario with many countries on lockdown and wide-spread travel restrictions in place, this Fort Worth, TX- based carrier is trimming its capacity, inducing cancellation of multiple flights.
With traffic declining at a faster pace than capacity, consolidated passenger load factor (% of seats filled by passengers) is likely to have fallen in the to-be-reported quarter. Consequently, the Zacks Consensus Estimate for American Airlines’ first-quarter passenger load factor stands at 80, indicating a 4.8% decline from the figure reported in fourth-quarter 2019. Also, the Zacks Consensus Estimate for first-quarter passenger revenue per available seat miles (a measure of unit revenues) stands at 13.53 cents, implying an 8.1% fall from the figure reported in the sequential quarter. However, low fuel costs are likely to have supported the bottomline in the to-be-reported quarter. Evidently, the Zacks Consensus Estimate for March quarter’s average fuel price is pegged at $1.87 per gallon, indicating an 8.8% decline from the number reported in fourth-quarter 2019.
Trend in Estimate Revision
The Zacks Consensus Estimate for first-quarter bottom line currently stands at a loss of $2.04. Meanwhile, earnings figure of 52 cents per share were reported in the year-ago quarter. The Zacks Consensus Estimate for first-quarter sales is currently pegged at $9.33 billion, suggesting an 11.9% decrease from the year-ago reported figure. With the coronavirus outbreak dealing a severe blow to the company, estimates for first-quarter bottom line have moved south from earnings of 43 cents to the current loss projection over the past 60 days.
Earnings Whispers
The proven Zacks model predicts a beat for American Airlines this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of beating estimates. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: American Airlines has an Earnings ESP of +4.07%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American Airlines currently carries a Zacks Rank #3.
Highlights of Q4 Earnings
American Airlines’ earnings (excluding 20 cents from non-recurring items) of $1.15 per share matched the Zacks Consensus Estimate. However, the bottom line improved 10.6% on a year-over-year basis, backed by low fuel costs. Operating revenues of $11,313 million increased 3.4% year over year and also marginally beat the Zacks Consensus Estimate of $11,308.3 million. Higher passenger revenues drove the top line.
Other Stocks to Consider
Here are a few other stocks worth considering from the broader Zacks Transportation sector as our model shows that these too have the right combination of elements to beat on earnings this reporting cycle.
Southwest Airlines (LUV - Free Report) has an Earnings ESP of +22.00% and a Zacks Rank of 3. The carrier is scheduled to report first-quarter 2020 earnings on Apr 28.
Trinity Industries (TRN - Free Report) has an Earnings ESP of +7.14% and is Zacks #3 Ranked. The company is scheduled to report first-quarter 2020 earnings on Apr 29.
Norfolk Southern Corporation (NSC - Free Report) has an Earnings ESP of +0.02% and is#3 Ranked. The company is scheduled to report first-quarter 2020 earnings on Apr 29.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>