{"id":35231,"date":"2023-07-13T15:01:21","date_gmt":"2023-07-13T19:01:21","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/what-to-expect-from-american-airlines-q2\/"},"modified":"2023-07-13T15:01:23","modified_gmt":"2023-07-13T19:01:23","slug":"what-to-expect-from-american-airlines-q2","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=35231","title":{"rendered":"What To Expect From American Airlines\u2019 Q2?"},"content":{"rendered":"<div>\n<p><strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/AAL\/\">American Airlines (NASDAQ: AAL)<\/strong> will report its Q2 2023 results on Thursday, July 20. We expect the company\u2019s revenues to come in at $13.6 billion, slightly below the consensus estimate of $13.7 billion. This would mark year-over-year growth of about 1%. Earnings are likely to come in at about $1.52 on a per-share and adjusted basis, slightly below the $1.54 consensus estimate. See our interactive dashboard analysis on<strong> <\/strong><strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/AAL\/no-login-required\/Htjou5LE\/American-Airlines-AAL-Earnings-Preview-AAL-Stock-Likely-To-Trade-Lower-Due-To-Weak-FY-2023Q2-Results-With-Revenues-As-Well-As-Earnings-Missing-Expectations?fromforbesandarticle=trefis230713\">American Airlines Earnings Preview<\/strong> for more details on how American Airlines\u2019 revenues and earnings will likely trend for the quarter. So, what are some of the trends that are likely to drive American Airlines\u2019 results?<\/p>\n<p>The company will likely continue to benefit from the robust travel demand. It should see a continued rise in total available seat miles, and the passenger load factor will likely remain strong. However, it will be a tough comparison with the prior-year quarter, which saw a record travel demand. The average ticket price has also cooled this year while overall capacity has expanded. Looking at Q1 2023, <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/AAL\/no-login-required\/TcXjjJar\/American-Airlines-Revenue?fromforbesandarticle=trefis230713\">American Airlines\u2019 revenues<\/strong> were up 37%, led by a 42% rise in Passenger revenue. While the ASMs were up 9% in Q1, passenger revenue per available seat mile surged 30% to 17.08 cents.<\/p>\n<p>Looking at the bottom line, American Airlines reported a $0.05 earnings per share on an adjusted basis in Q1, compared to a $2.32 loss per share in the prior-year quarter. The company\u2019s average fuel price per gallon stood at $3.28 in Q1, and it should be lower in Q2 vs. its prior-year figure of $4.03. The average U.S. Gulf Coast Kerosene Jet fuel price per gallon fell from $3.90 (end of June last year) to $2.20 now. Now that fuel prices have cooled compared to last year, the company will likely see its operating margin expand. After seeing a sharp decline from 6.7% in 2019 to -60.1% in 2020 due to the impact of the pandemic, American Airlines operating margin has gradually recovered to 3.3% in 2022. Our <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/AAL\/no-login-required\/ZC55nppQ\/American-Airlines-AAL-Operating-Income-Comparison?fromforbesandarticle=trefis230713\">American Airlines Operating Income Comparison<\/strong> dashboard has more details.<\/p>\n<p>Looking at AAL\u2019s stock price, we believe that it is fully valued. We estimate <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/AAL\/no-login-required\/H7M5ZRC0\/American-Airlines-AAL-Valuation-Is-AAL-Stock-Expensive-Or-Cheap-?fromforbesandarticle=trefis230713\">American Airlines\u2019 valuation<\/strong> to be $18 per share, aligning with its current price of $19. Our forecast is based on a 6x P\/E multiple for AAL and expected earnings of $2.90 on a per-share and adjusted basis for the full-year 2023. The company has guided for adjusted EPS to be in the range of $2.50 to $3.50 for the full-year 2023.<\/p>\n<p><fbs-ad position=\"inread\" progressive=\"\" ad-id=\"article-0-inread\" aria-hidden=\"true\" role=\"presentation\"><\/fbs-ad><\/p>\n<p>American Airlines has high debt levels, which increased from $24.3 billion in 2019 to $38.1 billion in 2022, while its total cash increased from around $4.0 billion to $13.4 billion over the same period, primarily due to additional debt raised, as heavy negative operating cash flows in 2020 of $6.5 billion almost completely wiped out positive operating cash flows in 2019, 2021, and 2022. The high debt burden is a near-term risk that the company faces. As of Q1 2023, the total debt for AAL stood at $35.1 billion. Given that interest rates remain elevated, the company\u2019s cost to serve its debt will likely remain high in the near term, weighing on its overall bottom-line growth.<\/p>\n<p>While American Airlines stock looks fully valued, check out how other American Airlines Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.<\/p>\n<p>What if you\u2019re looking for a more balanced portfolio instead? Here\u2019s a <strong data-ga-track=\"ExternalLink:https:\/\/www.trefis.com\/data\/companies\/PORTFOLIOS\/no-login-required\/RsQ6oXgC\/High-Quality-Portfolio-30-Stocks-with-189-Return-Since-2016-vs-88-for-S-P-500?fromforbesandarticle=trefis230713\">high-quality portfolio<\/strong> that\u2019s beaten the market consistently since 2016.<\/p>\n<p>Invest with <strong>Trefis <\/strong><strong data-ga-track=\"ExternalLink:https:\/\/dashboards.trefis.com\/data\/companies\/PORTFOLIOS\/no-login-required\/M7MacZNG?fromforbes\">Market Beating Portfolios<\/strong><\/p>\n<p>See all <strong>Trefis <\/strong><strong data-ga-track=\"ExternalLink:https:\/\/dashboards.trefis.com\/data\/price-estimates?fromforbes\">Price Estimates<\/strong><\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.forbes.com\/sites\/greatspeculations\/2023\/07\/13\/what-to-expect-from-american-airlines-q2\/\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>American Airlines (NASDAQ: AAL) will report its Q2 2023 results on Thursday, July 20. We expect the company\u2019s revenues to come in at $13.6 billion, slightly below the consensus estimate of $13.7 billion. This would mark year-over-year growth of about 1%. Earnings are likely to come in at about $1.52 on a per-share and adjusted [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":35232,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-35231","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets","tag-featured"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What To Expect From American Airlines\u2019 Q2? | iFintechWorld<\/title>\n<meta name=\"description\" content=\"American Airlines (NASDAQ: AAL) will report its Q2 2023 results on Thursday, July 20. 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