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American Airlines witnessed a remarkable 10% surge in its stock on Thursday, fueled by strong demand and an impressive 2024 profit forecast. The company reported a $19 million profit for the last quarter of 2023, surpassing Wall Street estimates on both the top and bottom lines.
In a breakdown of the fourth-quarter performance, American Airlines outperformed expectations with adjusted earnings per share of 29 cents, compared to the anticipated 10 cents. The airline also exceeded revenue expectations, reporting $13.06 billion against the projected $13.02 billion.
While the reported net income of $19 million marked a nearly 98% decrease from the previous year’s $803 million, American Airlines attributed the drop to one-time items, including the impact of a new labor agreement with its pilots. Adjusting for these factors, the airline achieved 29 cents per share in earnings.
CEO Robert Isom expressed satisfaction with the results, stating, “We’re really pleased with the results; we closed out the year strong.” Isom highlighted the company’s focus on reliability, profitability, and strengthening the balance sheet, all of which were deemed successful in the closing quarter of 2023.
Isom emphasized optimism for the upcoming quarters, anticipating a busy first and second quarter for travel. Despite projecting a net loss per share of between 15 cents and 35 cents, adjusted, for the first quarter of 2024, American Airlines expects a strong year overall, with adjusted earnings per share estimated between $2.25 and $3.25 for the full year.
To reward its employees, American Airlines plans to distribute a profit-sharing payment in March, reflecting the strength of the business. The positive financial report comes amidst a busy day for the airline industry, with Southwest and Alaska also releasing their fourth-quarter earnings.
The CEO addressed the ongoing issues with Boeing, urging the company to “get their act together.” Although American Airlines doesn’t operate the Boeing 737 Max 9, the recent grounding of the aircraft model has raised concerns in the industry. CEO Isom criticized Boeing for its persistent challenges, calling them “unacceptable” during an earnings call on Thursday.
As the airline industry grapples with winter weather challenges and external factors, American Airlines’ robust performance and optimistic outlook stand out, providing a beacon of hope for the sector in 2024.