American Airlines trims annual profit forecast due to higher fuel prices

Overview

• US airline's Q2 revenue rose 16%, a slight beat of analyst expectations

• Adjusted EPS for Q2 beat analyst expectations

• Company offset nearly half of $2.2 bln yr/yr fuel cost increase with higher fares

Outlook

• American expects Q3 revenue growth of 16% to 19% year over year

• Company sees Q3 adjusted EPS between ($0.70) and ($0.10)

• American now expects FY 2026 adjusted EPS between ($0.65) and $0.65

Result Drivers

• STRONG DEMAND - Co said robust demand across premium, main cabin, domestic, and international segments drove revenue growth

• PREMIUM AND BUSINESS TRAVEL - Premium passenger unit revenue rose 13.4% and managed corporate revenue increased 26% yr/yr, per co

• FARE INCREASES OFFSET FUEL COSTS - Co offset nearly 50% of $2.2 bln yr/yr fuel expense increase through higher fares

Company press release: ID:nGNXbcVHyL

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", 13 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the airlines peer group is "buy"

• Wall Street's median 12-month price target for American Airlines Group Inc is $19.25, about 30.2% above its July 22 closing price of $14.79

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 8 three months ago

Reuters Recommended Reads

• July 22 - Southwest Airline lowers 2026 profit floor as fuel costs blunt pricing gains

• July 22 - Alaska Air says its underlying business strengthened despite fuel-hit quarter

• July 23 - India's IndiGo posts quarterly loss on soaring fuel costs

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)