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American Airlines Group Inc. (NASDAQ:AAL) shares are trading higher after the company reported first-quarter financial results and issued second-quarter adjusted EPS guidance with a midpoint above estimates.
Total revenue increased 3.1% to $12.57 billion, just missing estimates of $12.60 billion.
Adjusted operating margin stood at 0.6% in the first quarter vs. 3.7% a year ago.
The company reported an adjusted EPS loss of $(0.34), which missed the consensus estimate of $(0.29).
Related: American Airlines Is ‘A Guide And Beat Story,’ Analyst Says As Stock Gets Upgrade
The company generated an operating cash flow of $2.2 billion and a free cash flow of $1.4 billion in the quarter.
American Airlines reduced its total debt by nearly $950 million in the first quarter and achieved over 80% of its target of reducing debt by $15 billion by the end of 2025.
Guidance: American Airlines expects its second-quarter 2024 adjusted EPS of $1.15 – $1.45, versus the consensus of $1.18.
American reiterated its FY24 adjusted EPS outlook of $2.25-$3.25 versus the consensus of $2.35.
The company expects its second-quarter 2024 capacity to be up 7%-9%, with full-year capacity to be up mid-single digits Y/Y.
The second-quarter total revenue per available seat mile (TRASM) is expected to be down approximately 1%-3% Y/Y.
The company expects its second-quarter cost per available seat mile (CASM-ex), excluding fuel, to be up approximately 1% to 3% Y/Y, with its full-year CASM-ex up approximately 0.5% to 3.5% Y/Y.
Robert Isom, CEO, said, “While we aren’t satisfied with our first-quarter financial results, we have a strong foundation in place, and we remain on track to deliver on our full-year financial targets. Our team is running a fantastic operation, driving revenue through our commercial initiatives, efficiently managing costs, and producing free cash flow to further strengthen our balance sheet.”
In March, American Airlines placed orders for 260 new aircraft, including Airbus A321neo, Boeing 737 MAX 10, and Embraer E175 models.
Investors can gain exposure to the stock via U.S. Global Jets ETF (NYSE:JETS) and Themes Airlines ETF (NASDAQ:AIRL).
Also Read: American Airlines Pilots Warn Amid Safety Concerns Surge: Report
Price Action: AAL shares are up 3.45% at $14.40 premarket at the last check Thursday.
Photo via Shutterstock
