Shares of American Airlines edged higher Tuesday after the airline updated its third-quarter guidance, but kept it mostly in line with previous estimates.
In a Securities and Exchange Commission filing, the airline said it expects third-quarter revenue to be down approximately 25% from the same quarter in 2019. The company previously expected revenue to be down 24% to 28%.
American (ticker: AAL) also said it sees a GAAP net profit in the third quarter, and a net loss excluding special items of between $620 million and $675 million. It expects to end the quarter with $18 billion in total available liquidity.
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The air carrier flew 61.1 billion total available seat miles in the third quarter, down 19.4% from the third quarter of 2019. This estimate is in line with previous guidance, which calculated available seat miles down between 15% and 20%. It also expects its quarterly cost per available seat mile to increase between 10% and 11% from 2019 due to lower capacity.
Average fuel costs were estimated at $2.08 a gallon vs. prior guidance of $2.10 to $2.15.
American said it foresees a "robust" travel period for its fourth quarter, and expects to fly 62.2 million available seat miles.
Based on the new guidance, Citigroup analyst Stephen Trent calculated a third-quarter loss for of 96 cents to $1.04 a share, better than his previous estimate of a loss of $1.36. The analyst maintained a Neutral rating on the stock, and set a target price of $21.50.
"American Airlines' 3Q guide looks marginally positive, with both unit revenue and fuel costs coming in a little better than our expectations," Trent wrote in a Tuesday research note. "Going forward, rising fuel costs appear to be a key item to watch."
The stock was rising 0.4% to $20.21 on Tuesday.