American Airlines Q3: Topline Miss, EPS Beat, Breakeven Earnings Forecast For Q4 & More

American Airlines Group Inc AAL reported third-quarter FY23 operating revenue of $13.48 billion, a slight year-over-year growth of 0.01%, missing the consensus of $13.51 billion.

AAL's 3Q23 adjusted EPS of $0.38 beat the consensus of $0.25.

In September, the airline cautioned that increased expenses would negatively impact their 3Q23 earnings, and updated its financial and operational guidance.

Passenger revenues were $12.42 billion (+0.2% Y/Y), cargo revenues declined 30.9% to $193 million, and Other increased 10.4% to $868 million.

Operating expenses for the quarter increased by 9.4% YoY to $13.71 billion.

The airlines reported an operating loss of $(233) million, compared to an income of $930 million a year ago.

The passenger load factor was 84%, down from 85.3% in 3Q22. Revenue passenger miles increased by 5.2% Y/Y, and ASM increased by 6.9% Y/Y.

The average aircraft fuel price per gallon, including related taxes, was $2.91 vs. $3.73 in 3Q22.

Net cash provided by operating activities for the nine months ending September 30, 2023, totaled $5.15 billion compared to $2.33 billion a year ago.

American Airlines reduced total debt by $1.4 billion in the quarter. The company ended the quarter with ~$13.5 billion of total available liquidity.

4Q23 Guidance: AAL expects adjusted EPS to be breakeven (consensus $0.07) and adjusted operating margin to be 2%-4%. Total capacity is expected to grow YoY by ~4.5%-6.5%, and Fuel ($/gallon) of $3.01-$3.11.

FY23 Guidance: American Airlines lowers its adjusted EPS outlook to $2.25-$2.50 (prior view $3.00-$3.75) versus consensus of $2.32. It anticipates an adjusted operating margin of around 7% and expects total capacity to grow Y/Y by ~6.5%.

Price Action: AAL shares are trading higher by 0.18% at $11.38 premarket on Thursday.