What to watch for when American Airlines (AAL) reports third-quarter 2024 earnings

American Airlines Group (NASDAQ: AAL) shares rose over 2% on Friday. The stock has gained 24% in the last three months. The airline is expected to release its third quarter 2024 earnings results on Thursday, October 24, before the market opens. Here’s what to expect from the earnings report:

revenue

Analysts forecast revenue of $13.47 billion for AAL in the third quarter of 2024, down slightly from revenue of $13.48 billion in the same period last year. In the second quarter of 2024, revenue increased 2% year over year to $14.3 billion.

Result

The consensus EPS target for the third quarter of 2024 is $0.15, compared to adjusted EPS of $0.38 in the year-ago quarter. In the second quarter of 2024, adjusted earnings per share were $1.09.

Points to note

Last quarter, American Airlines faced weakness in the domestic market. Sales were impacted by industry oversupply, leading to higher-than-expected discounting activity. Adverse weather conditions also affected operations at several hubs.

In its Q2 report, the company predicted travel would decline 2.5-4.5% year over year in the third quarter. AAL lowered its planned capacity growth for the second half of the year and forecast capacity growth of around 3% for Q3.

The company forecast CASMx for the third quarter of 2024 to increase by approximately 1-3% compared to the previous year and the fuel price to be between $2.55 and $2.75 per gallon. An adjusted operating margin of 2-4% was forecast for the third quarter.

AAL is likely to have benefited from strong summer travel demand and the decline in fuel costs, and these benefits could be reflected in its third quarter results. The company is also expected to benefit from loyalty revenue growth and profits from its AAdvantage business program.