American Airlines tumble on weaker revenue, profit outlook

American Airlines shares tumbled more than 8 percent in morning trading Thursday, after the largest U.S. airline cut its profit forecast and warned investors that it struggled to grow revenue at the end of 2018.

The cuts dealt another blow to airline stocks, which have largely lagged the broader market over the past year as investors fretted about higher fuel costs and the industry’s ability to increase fares and revenue.

Other carriers were also sharply lower in morning trading. Shares of Delta Air Lines fell more than 4 percent, while United Airlines lost more than 5 percent. Southwest Airlines fell close to 3 percent.

American said its revenue per available seat mile, a key industry metric, rose 1.5 percent in the fourth quarter of last year from the year-earlier period, compared with a range of 1.5 to as much as 3.5 percent it gave investors in the fall.

American said it expects to post per-share earnings of between $4.40 and $4.60, down from its estimate in October of $4.50 to $5.

The company’s shares have dropped far more than its competitors. Over the last 12 months, American’s stock price dropped 44 percent, ramping up pressure on the company’s CEO Doug Parker when the company reports fourth-quarter and full-year results at the end of the month.

Delta and United report earnings next week.

Source : CNBC

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