American Airlines’ AAL fourth-quarter 2024 earnings (excluding 2 cents from non-recurring items) of 86 cents per share beat the Zacks Consensus Estimate of 64 cents. In the year-ago quarter, AAL reported earnings of 29 cents per share. Operating revenues of $13.66 billion surpassed the Zacks Consensus Estimate of $13.42 billion and increased 4.6% year over year.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Despite the earnings and revenue beat, the AAL stock declined in the pre-market trading due to the disappointing outlook. AAL expects a loss per share of 20-40 cents in the first quarter of 2025. The Zacks Consensus Estimate was for an earnings of 4 cents per share. AAL expects 2025 adjusted earnings per share to be $1.7-$2.7. The mid-point of the guided range is below the Zacks Consensus Estimate of $2.53.
AAL’s disappointing guidance is in stark contrast to the favorable estimation of United Airlines UAL and Delta Air Lines DAL, who are benefiting from favorable pricing and strong winter demand. In contrast, AAL has lost business travelers to its competitors due to a faulty sales strategy, implemented in 2023. AAL has spent much of 2024 correcting the mistake and rebuilding its sales strategy to lure more corporate accounts. The carrier is making slow progress in its effort to regain corporate travel.
American Airlines Group Inc. Price, Consensus and EPS Surprise
American Airlines Group Inc. Price, Consensus and EPS Surprise
American Airlines Group Inc. price-consensus-eps-surprise-chart | American Airlines Group Inc. Quote
More on Q4 Earnings of AAL
Passenger revenues, accounting for 90.8% of the top line, increased 3.3% year over year to $12.4 billion. The metric was ahead of our estimate of $12.24 billion. Cargo revenues increased 10.5% to $220 million. The metric surpassed our estimate of $202.6 million. Other revenues jumped 21.8% to $1.04 billion, which surpassed our expectation of $894 million.
Total revenue per available seat miles (a key measure of unit revenues: TRASM) increased to 19.1 cents from 18.72 cents recorded a year ago. Passenger revenue per available seat miles (PRASM) increased 0.8% to 17.34 cents. The figure was higher than our expectation of 17.23 cents. Consolidated yield decreased 0.7% to 20.44 cents, just ahead of our estimate of 20.42 cents.
Consolidated traffic (measured in revenue passenger miles) rose 4% year over year. To cater to this increased demand, capacity (measured in average seat miles) expanded 2.5%. Consolidated load factor (percentage of seats filled by passengers) increased 1.3 points to 84.9%. The figure for the load factor was higher than our expectation of 84.4%.
Total operating costs (on a reported basis) inched up 1% year over year to $12.5 billion, with expenses on salaries, wages and benefits growing 11.2% to $4.1 billion. The labor deal, inked with its pilots in 2023, contributed to this increase. Expenses on aircraft fuel and taxes decreased 20.8% to $2.5 billion. Average fuel price per gallon (including related taxes) decreased to $2.34 from $3.06 a year ago.
Consolidated operating costs per available seat mile (excluding fuel and special items) increased 5.7% to 13.99 cents. The actual figure was a tad more than our estimate of 13.98 cents. Fuel gallon consumption increased 3.6% to $1.07 billion in the fourth quarter of 2024.
American Airlines, currently sporting a Zacks Rank #1 (Strong Buy), achieved its goal of reducing total debt from peak levels by $15 billion a year ahead of schedule.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Remaining Aspects of AAL’s Outlook
Management expects TRASM in the first quarter of 2025 to be between 3% and 5%, higher than first-quarter 2024 actuals. System capacity is estimated to be either flat or decrease up to 2% from first-quarter 2024 levels. Cost per available seat miles (adjusted) in the March quarter is expected to increase in high-single digits from first-quarter 2024 actuals. AAL expects its first-quarter adjusted operating margin to be approximately flat to 1%. The effective tax rate for the March quarter is expected to be 25%.
For full-year 2025, TRASM is expected to be up in the 4.5-7.5% band from 2024 actuals. Management anticipates capacity to improve in low-single digits from the year-ago levels. Cost per available seat miles (adjusted) is expected to increase in mid-single digits from the prior-year levels.
The company envisions total non-operating expenses for 2025 to be $1.35 billion. The effective tax rate for full-year 2025 is also expected to be 25%. AAL expects free cash flow for 2025 to be more than $2 billion.
Q4 Performances of Other Transportation Companies
Delta reported fourth-quarter 2024 earnings (excluding 56 cents from non-recurring items) of $1.85 per share, which surpassed the Zacks Consensus Estimate of $1.76. Earnings increased 44.5% on a year-over-year basis due to low fuel costs.
DAL’s revenues of $15.56 billion surpassed the Zacks Consensus Estimate of $14.99 billion and increased 9.4% on a year-over-year basis, driven by strong holiday travel demand. Adjusted operating revenues (excluding third-party refinery sales) was $14.4 billion, up 5.7% year over year. First-quarter 2025 earnings are expected to nearly double from first-quarter 2024 actuals. For full-year 2025, management expects earnings per share on an adjusted basis to be greater than $7.35, indicating an increase of more than 19% from 2024 actuals.
J.B. Hunt Transport Services JBHT reported fourth-quarter 2024 earnings per share of $1.53, which fell short of the Zacks Consensus Estimate of $1.62. However, the bottom line increased 4.1% on a year-over-year basis.
JBHT’s total operating revenues of $3.15 billion narrowly beat the Zacks Consensus Estimate of $3.13 billion but declined 4.8% year over year. This decline was mainly due to lower fuel surcharge revenues and yield pressure in its Intermodal segment.
JBHT’s fourth-quarter 2024 operating revenues of $2.78 billion, excluding fuel surcharge revenues, decreased 2% from the year-ago reported quarter. Total operating income for the reported quarter increased 2% year over year to $207 million.
United Airlines reported solid fourth-quarter 2024 results, with both earnings and revenues surpassing the Zacks Consensus Estimate.
Quarterly earnings per share (excluding 31 cents from non-recurring items) of $3.26 surpassed the Zacks Consensus Estimate of $3.01. The bottom line increased 63% on a year-over-year basis. UAL expects first-quarter 2025 earnings between 75 cents and $1.25. The Zacks Consensus Estimate is currently pegged at 65 cents.
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