American Airlines (AAL) Raises Q2 EPS Guidance
American Airlines (NASDAQ: AAL)
On May 31, 2023, American Airlines Group Inc. (the “Company”) is presenting information relating to its financial and operational outlook at the Bernstein Strategic Decisions Conference. As previously announced, this presentation will be webcast, with the link available at the Company’s website at www.aa.com under “Investor Relations.”
Additionally, the Company is providing investors an update regarding its financial and operational guidance for the second quarter of 2023. The Company now expects total revenue per available seat mile to be down approximately 1.0% to 3.0% versus the second quarter of 2022. This improvement in unit revenue versus prior guidance is driven by continued strength in the demand environment. The Company now expects to pay an average of between $2.55 to $2.65 per gallon of jet fuel in the second quarter. Based on these updated assumptions, the Company now expects its second quarter adjusted operating margin4 to be approximately 12.5% to 14.5% and adjusted earnings per diluted share5 to be between approximately $1.45 to $1.65. The Company does not intend to provide a further update to its financial and operational guidance until the release of its second quarter 2023 results.
| Estimated 2Q 2023 | |||||||||||
| Current Guidance | Previous Guidance | ||||||||||
| Available seat miles (vs. 2Q 2022) | No change | ~ +3.5% to +5.5% | |||||||||
| TRASM1 (vs. 2Q 2022) | ~ -1.0% to -3.0% | ~ -2.0% to -4.0% | |||||||||
| Average fuel price2 (incl. taxes) ($/gallon) | ~ $2.55 to $2.65 | ~ $2.65 to $2.75 | |||||||||
| CASM-ex3 (vs. 2Q 2022) | No change | ~ +3.5% to +5.5% | |||||||||
| Adjusted operating margin4 | ~ 12.5% to 14.5% | ~ 11.0% to 13.0% | |||||||||
| Adjusted earnings per diluted share5 ($/share) | ~ $1.45 to $1.65 | ~ $1.20 to $1.40 | |||||||||
| Estimated Full Year 2023 | |||||||||||
| Current Guidance | Previous Guidance | ||||||||||
| Available seat miles (vs. 2022) | No change | ~ +5.0% to +8.0% | |||||||||
| CASM-ex3 (vs. 2022) | No change | ~ +2.0% to +5.0% | |||||||||
| Adjusted earnings per diluted share5 ($/share) | No change | ~ $2.50 to $3.50 | |||||||||
1Total revenue per available seat mile.
2Updated based on the forward fuel curve as of May 26, 2023.
3CASM-ex is cost per available seat mile (CASM) excluding fuel and net special items and is a non-GAAP measure.
4Adjusted operating margin excludes net special items and is a non-GAAP measure.
5Adjusted earnings per diluted share excludes net special items and is a non-GAAP measure. Adjusted earnings per diluted share incorporates an interest expense addback for the 6.5% convertible notes of $12 million for 2Q 2023 and $44 million for full year 2023, in each case net of estimated profit sharing, short-term incentive and tax effects. Adjusted earnings per diluted share calculation assumes a diluted share count of 721.3 million for 2Q 2023 and 722.3 million for full year 2023. Shares outstanding are based upon several estimates and assumptions, including average per share stock price and stock award activity. The number of shares in actual calculations of earnings per share will likely differ from those set forth above.
Certain components of the guidance provided exclude fuel and net special items. The updated guidance provided herein is presented to provide comparability with prior guidance. The Company is unable to fully reconcile such forward-looking guidance to the corresponding GAAP measure because the full nature and amount of net special items cannot be determined at this time.
The information in this Item 7.01 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.