American Airlines stock surges after unit revenue guidance raised

Shares of American Airlines Group Inc. AAL, -1.31% rallied 2.8% in premarket trading Wednesday, after the air carrier raised its second-quarter unit revenue outlook, citing higher-than-expected load factor as seat supply was below expectations. The company said it now expects total revenue per available seat mile (TRASM) to increase 3.0% to 4.0% from a year ago, up from its previous guidance range of up 1.0% to 3.0%. Meanwhile, the company said cargo revenue was lower than projections given weakness across Asian and European markets. Capacity for the quarter was about 72.3 billion available seat miles (ASM), about 1.1 billion ASM below previous guidance as a result of flight cancellations. American said it cancelled about 7,800 flights in Q2 as a result of the groundings of Boeing Co.’s BA, +0.56% 737 Max 8 aircraft, with the negative impact to earnings estimated at $185 million. American has so far cancelled all 737 Max flights through Sept. 3. The stock has edged up 0.8% year to date through Tuesday, while the Dow Jones Transportation Average DJT, -0.74% has climbed 12.7% and the Dow Jones Industrial Average DJIA, -0.08% has advanced 14.8%.

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