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The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters (missed once), the average beat being 7.8%.
Given this backdrop, let's delve deeper into the factors that are likely to have influenced AAL’s first-quarter 2023 performance.
American Airlines Group Inc. Price and EPS Surprise
We expect upbeat air-travel demand, particularly on the domestic front, to have boosted American Airlines’ top-line performance in the to-be-reported quarter. The Zacks Consensus Estimate is pegged at $12.3 billion, indicating a 37.7% rise year over year. Driven by the uptick, AAL expects first-quarter 2023 adjusted operating margin to be 3.5% (earlier guidance: 2.5-4.5%).
Moreover, management expects TRASM to be 25.5% higher than first-quarter 2022 actuals. This is the mid-point of the 24-27% uptick expected previously. Passenger revenues, which account for the bulk of the top line, are likely to have been high, in turn, boosting total revenues. American Airlines expects system capacity to increase 9.2% from the figure reported in first-quarter 2022, from 8-10% uptick expected previously.
Driven by upbeat traffic, load factor (percentage of seats filled by passengers) is likely to have been impressive in the March quarter. The Zacks Consensus Estimate for load factor is pegged at 82%, higher than the 74% reported in first-quarter 2022.
However, rising fuel cost might have affected the bottom-line performance in the quarter under review. Fuel gallon consumption is now expected to be $970 million, higher than $955 million expected previously.
AAL expects adjusted earnings per share (excluding net special items) to be in the 1-5 cents range (earlier guidance called for breakeven earnings). The mid-point of the revised guidance (3 cents) is lower than the Zacks Consensus Estimate of 4 cents. Our estimate for first-quarter 2023 earnings indicates a 101% increase on a year-over-year basis.
What Our Model Says
Our proven model predicts an earnings beat for AAL this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
American Airlines has an Earnings ESP of +66.67% (the Most Accurate Estimate is pegged at 7 cents per share at present, higher than the Zacks Consensus Estimate) and carries a Zacks Rank #2.
Highlights of Q4
American Airlines’ fourth-quarter 2022 earnings (excluding 3 cents from non-recurring items) of $1.17 per share surpassed the Zacks Consensus Estimate of $1.14 despite higher costs.
Operating revenues of $13,189 million increased 39.9% year over year but marginally missed the Zacks Consensus Estimate of $13,218.7 million.
Other Stocks to Consider
Here are a few other stocks from the broader Zacks Transportation sector that investors may also consider, as our model shows that these too have the right combination of elements to beat on their first-quarter 2023 earnings.
The company delivered a trailing four-quarter earnings surprise of 3.5%, on average. The Zacks Consensus Estimate for CNI’s first-quarter 2023 earnings has surged 18.3% year over year.
Copa Holdings (CPA - Free Report) has an Earnings ESP of +19.57% and sports a Zacks Rank #1. It will release first-quarter 2023 results on May 10.
The Zacks Consensus Estimate for CPA’s first-quarter 2023 earnings has improved more than 100% year over year.
Image: Shutterstock
Is a Beat in Store for American Airlines (AAL) in Q1 Earnings?
American Airlines (AAL - Free Report) is scheduled to report first-quarter 2023 results on Apr 27, before market open.
The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters (missed once), the average beat being 7.8%.
Given this backdrop, let's delve deeper into the factors that are likely to have influenced AAL’s first-quarter 2023 performance.
American Airlines Group Inc. Price and EPS Surprise
American Airlines Group Inc. price-eps-surprise | American Airlines Group Inc. Quote
We expect upbeat air-travel demand, particularly on the domestic front, to have boosted American Airlines’ top-line performance in the to-be-reported quarter. The Zacks Consensus Estimate is pegged at $12.3 billion, indicating a 37.7% rise year over year. Driven by the uptick, AAL expects first-quarter 2023 adjusted operating margin to be 3.5% (earlier guidance: 2.5-4.5%).
Moreover, management expects TRASM to be 25.5% higher than first-quarter 2022 actuals. This is the mid-point of the 24-27% uptick expected previously.
Passenger revenues, which account for the bulk of the top line, are likely to have been high, in turn, boosting total revenues. American Airlines expects system capacity to increase 9.2% from the figure reported in first-quarter 2022, from 8-10% uptick expected previously.
Driven by upbeat traffic, load factor (percentage of seats filled by passengers) is likely to have been impressive in the March quarter. The Zacks Consensus Estimate for load factor is pegged at 82%, higher than the 74% reported in first-quarter 2022.
However, rising fuel cost might have affected the bottom-line performance in the quarter under review. Fuel gallon consumption is now expected to be $970 million, higher than $955 million expected previously.
AAL expects adjusted earnings per share (excluding net special items) to be in the 1-5 cents range (earlier guidance called for breakeven earnings). The mid-point of the revised guidance (3 cents) is lower than the Zacks Consensus Estimate of 4 cents. Our estimate for first-quarter 2023 earnings indicates a 101% increase on a year-over-year basis.
What Our Model Says
Our proven model predicts an earnings beat for AAL this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
American Airlines has an Earnings ESP of +66.67% (the Most Accurate Estimate is pegged at 7 cents per share at present, higher than the Zacks Consensus Estimate) and carries a Zacks Rank #2.
Highlights of Q4
American Airlines’ fourth-quarter 2022 earnings (excluding 3 cents from non-recurring items) of $1.17 per share surpassed the Zacks Consensus Estimate of $1.14 despite higher costs.
Operating revenues of $13,189 million increased 39.9% year over year but marginally missed the Zacks Consensus Estimate of $13,218.7 million.
Other Stocks to Consider
Here are a few other stocks from the broader Zacks Transportation sector that investors may also consider, as our model shows that these too have the right combination of elements to beat on their first-quarter 2023 earnings.
Canadian National Railway Company (CNI - Free Report) has an Earnings ESP of +1.72% and a carries Zacks Rank #3. It will release first-quarter 2023 results on Apr 24. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company delivered a trailing four-quarter earnings surprise of 3.5%, on average. The Zacks Consensus Estimate for CNI’s first-quarter 2023 earnings has surged 18.3% year over year.
Copa Holdings (CPA - Free Report) has an Earnings ESP of +19.57% and sports a Zacks Rank #1. It will release first-quarter 2023 results on May 10.
The Zacks Consensus Estimate for CPA’s first-quarter 2023 earnings has improved more than 100% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.