American Airlines' premarket gains were wiped out in early trading Thursday, as the airline beat earnings expectations in the fourth quarter but signaled a difficult first quarter of 2022 was ahead.
The carrier (ticker: AAL) reported an adjusted net loss of $921 million, or $1.42 per share, and revenue of $9.42 billion in the fourth quarter, which was 17% down on 2019 levels. Analysts surveyed by FactSet had expected an adjusted loss of $1.46 per share on sales of $9.34 billion.
American sees the first quarter of 2022 comparing less favorably, though, expecting revenue to be 20% to 22% lower than the first quarter of 2019. However, that is better than United Airlines' (UAL) forecast of 20% to 25% lower and Delta Air Lines' (DAL) guidance for revenue to be 24% to 28% lower than 2019 levels.
American Airlines stock was trading 0.3% down in late morning trading, recovering from earlier heavier losses. At one point before the open the stock was 2.7% up.
The carrier lifted its fourth-quarter guidance last week, expecting total revenue to be 17% down on 2019 levels, beating its previous forecast of 20% lower. American's earlier guidance was made back in November before the emergence of the Omicron coronavirus variant and the holiday travel season.
The company said Thursday its performance was "particularly strong" during the year-end holiday period, despite an increase in sick calls due to the Omicron variant.
"American did not have the same issues as other airlines late in the quarter because they proactively reduced December capacity when the Omicron variant started to rise," Cowen analyst Helane Becker said.
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American said it expects capacity to be 8% to 10% down compared with the first quarter of 2019. For the full-year 2022 it sees capacity down around 5% compared with 2019.
In contrast, United Airlines stock was 1.4% lower in premarket trading, despite the carrier reporting a smaller-than-expected fourth-quarter loss late Wednesday.
The carrier reported an adjusted loss of $1.60 per share, beating the FactSet consensus for a $2.09 per share loss. Sales of $8.19 billion also beat estimates of $7.96 billion.
However, United now sees full-year capacity in 2022 being lower than 2019 levels, from an earlier forecast of a 5% increase. The company said this was because "previously planned capacity increases are delayed to later in 2022 due to Omicron." First-quarter capacity is expected to be down 16% to 18% against 2019 levels, a greater drop than American's 8% to 10% outlook.
Costs per available seat mile, excluding fuel—used as a measure of efficiency—will also now be higher in 2022 than 2019, United said, though it will "decrease significantly" over the course of the year.
The impact of the Omicron variant has made it a difficult start to 2022 for U.S. airlines, but United CEO Scott Kirby expected improvement in the months ahead.
"While Omicron is impacting near-term demand, we remain optimistic about the spring and excited about the summer and beyond," he said.