American Airlines Earnings: Plenty of Problems, but Signs of Progress
American Airlines' (NASDAQ: AAL) second-quarter earnings report contained mixed news for shareholders. On the bright side, the airline giant's adjusted earnings per share came in slightly ahead of analysts' expectations last quarter. The company also stabilized its adjusted pre-tax margin. That said, American Airlines is lagging well behind its peers in terms of profitability, and many analysts and investors found its outlook for the rest of the year disappointing.
Indeed, looking just at the hard numbers, American Airlines seems to be in pretty bad shape. However, it is facing numerous short-term headwinds right now, and some of its main profit improvement initiatives haven't fully kicked in yet. The recent earnings report included some promising signs that American is close to turning the corner.
Earlier this month, American Airlines raised its unit revenue forecast for the second quarter, saying that revenue per available seat mile (RASM) would increase by 3% to 4% year over year. Last week, the company confirmed that RASM wound up right in the middle of that updated guidance range, rising 3.5%.
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