American Airlines ( NASDAQ: AAL ) is scheduled to announce Q2 earnings results on Thursday, July 21st, before market open.
The consensus EPS Estimate is $0.75 (+144.4% Y/Y) and the consensus Revenue Estimate is $13.4B (+79.9% Y/Y).
Analysts expect load factor to rise to pre-pandemic levels and improve Y/Y.
However, pilot shortage issue has led the airlines to discontinue service to several cities.
The airline has to pay more than $15B in debt maturities over the next three years.
Earnings History : The company has consistently exceeded the consensus mark past 3 quarters. After topping consensus in Q1 , the company guided Q2 capacity to be approximately 92% to 94% vs. 2Q19 and total revenue to be 6% to 8% higher than 2Q19.
Despite the revenue gains and EPS beat, the airline has reported nine quarters in a row of net losses and is expected to report a loss for FY2022.
Over the last 2 years, AAL has beaten EPS estimates 100% of the time and has beaten revenue estimates 75% of the time.
A quick look at company's Earnings surprise for past 8 quarters:
Over the last 3 months, EPS estimates have seen 13 upward revisions and 0 downward. Revenue estimates have seen 3 upward revisions and 0 downward.
Peer Comparison :
- Delta ( DAL ) reported mixed Q2 earnings on last Wednesday but sees Q3 revenue between $12.6B to $13.1B vs. $12.5B consensus and expects double digit operating margin in the quarter with full year profitability. Overall, DAL is on track to achieve 2024 targets of over $7 EPS and $4B of free cash flow.
- United Airlines ( UAL ) to report Q2 earnings results after market closes on Wednesday.
Analyst Rating:
- Susquehanna analyst Christopher Stathoulopoulos maintains a Neutral rating on the shares with price target cut to $15 from $19. The analyst said going into Q2 earnings he expects commentary from the US carriers to be positive but also believes a a "clearing event" is needed to get the stocks working again; specifically, downward revisions to FY22 and FY23 guidance for capacity and by extension, upward revisions to unit cost outlooks.
- Citi analyst Stephen Trent lowered the price target to $15.75 from $22 and maintains a Neutral rating on the shares. The company's financial leverage is higher than peers, it faces a little more regulatory uncertainty owing to recent agreements with other carriers, and revenue trends on its top 25 routes look less robust than those of its peers.
- Argus analyst John Staszak downgraded the stock to Hold from Buy, reflecting the company's high debt relative to other legacy airlines and concerns. Higher pilot salaries and high fuel prices are likely to hinder free cash flow and debt reduction, Staszak adds.
Stock gets a Hold rating from Wall Street Analysts , based on 15 of 20 analysts’ ratings of Hold; 2 analysts ratings of Strong Buy, 2 analysts ratings of Sell, and 1 analyst rating of Strong Sell.
SA Quant rating systems also screens the stock with a Strong Buy rating .
Stock lost around 19% , since the start of 2022.
Check the most recent analysis on the stock here .
For further details see:
American Airlines Q2 Earnings Preview: analysts expect profit for the first time in past 10 quarters