Shares in U.S. carriers slip after American Airlines cuts second-quarter outlook

Investing.com -- Shares in major U.S. carriers moved lower in premarket trading on Wednesday after American Airlines (NASDAQ: AAL) warned that it expects to earn less per share in the current quarter.

Delta Air Lines (NYSE: DAL) and Southwest Airlines (NYSE: LUV) both shed more than 2%, while United Airlines (NASDAQ: UAL), JetBlue Airways (NASDAQ: JBLU) and Alaska Air (NYSE: ALK) also dipped by over 1%.

American lowered its forecast for second-quarter earnings per share to between $1.00 to $1.15, down from $1.15 to $1.45 previously. Total revenue per available seat mile, or TRASM, is also now expected to fall by 5% to 6%, versus a prior estimate for a decline of 1% to 3%.

"American’s [second-quarter] revenue guidance likely had more ambitious underlying assumptions (vs. peers) when it was first provided," analysts at Evercore ISI said in a note to clients.

Quarterly flying capacity is now estimated to match the corresponding three-month period in 2023. American had said that the number would increase by 7% to 9%.

Its guidance for operating margins was also slashed to a range of 8.5% to 10.5%, down from 9.5% to 11.5%, despite the group ratcheting down its expectations for fuel expenses and cost per available seat mile.

Meanwhile, American announced the departure of Chief Commercial Officer Vasu Raja in June, a move that analysts flagged could raise questions around its broader strategy.

Shares in the firm slumped prior to the opening bell on Wall Street.

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