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American Airlines (AAL) Q1 Earnings Beat, Revenues Miss

American Airlines’ AAL first-quarter 2023 earnings (excluding 3 cents from non-recurring items) of 5 cents per share surpassed the Zacks Consensus Estimate by a penny despite higher costs. In the year-ago quarter, AAL incurred a loss of $2.32 per share when air-travel demand was not as buoyant as in the present scenario.

Operating revenues of $12,189 million increased 37% year over year, reflecting upbeat air-travel demand. However, the top line missed the Zacks Consensus Estimate of $12,198.9 million.

In the March-end quarter, passenger revenues, accounting for the bulk of the top line (91.1%), increased to $11,103 million from $7,818 million a year ago, driven by strong air-travel demand mainly on the domestic front. Cargo revenues decreased 38.7% to $223 million. Other revenues climbed 20.4%.

Total revenue per available seat miles (a key measure of unit revenue: TRASM) increased to 18.75 cents from 14.95 cents a year ago. Passenger revenue per available seat miles rose 30.1% to 17.08 cents, driven by buoyant air-travel demand. Consolidated yield increased 20.9%.

Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) rose to 52,014 million from 44,290 million a year ago. To cater to this increased demand, capacity (measured in average seat miles) expanded to 65,006 million from 59,533 million. Consolidated load factor (percentage of seats filled by passengers) increased 5.6 points to 80%.

Total operating costs (on a reported basis) rose 10.6% year over year to $11,751 million, with aircraft fuel expenses and related taxes increasing to $3,167 million from $2,052 million a year ago. Average fuel price per gallon (including related taxes) climbed to $3.28 from $2.80 a year ago.

Consolidated operating costs per available seat mile (excluding fuel and special items) edged down 1.4% to 13.18 cents. Fuel gallon consumption increased 7.9% to $965 million in first-quarter 2023.

American Airlines, currently carrying a Zacks Rank #2 (Buy), exited the year with $14.4 billion of total available liquidity. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


Management expects second-quarter 2023 TRASM to be 2-4% lower than second-quarter 2022 actuals.

AAL expects system capacity for the June-end quarter to increase 3.5-5.5% from the figure reported in second-quarter 2022. Fuel cost per gallon is expected to be $2.65-$2.75. Fuel gallon consumption is expected to be $1,040 million. The adjusted operating margin in the June-end quarter is anticipated to be 11-13%.

The company expects total non-operating expenses to be $405 million. Cost per available seat miles (adjusted)is expected to increase 3.5-5.5%. The expected new labor agreements are likely to have a 3-point impact on the metric. The company expects 2023 capacity to improve 5-8% year over year.

AAL expects the June-end quarter's earnings per share (excluding net special items) to be $1.20-$1.40. The Zacks Consensus Estimate is pegged at 97 cents.

AAL expects 2023 adjusted earnings per share between $2.50 and $3.50. The Zacks Consensus Estimate is pegged at $2.62 (below the mid-point of the guided range).

Q1 Performances of Other Transportation Companies

J.B. Hunt Transport Services, Inc.’s JBHT first-quarter 2023 earnings of $1.89 per share missed the Zacks Consensus Estimate of $2.04 and declined 17.5% year over year.

JBHT’s total operating revenues of $3,229.58 million lagged the Zacks Consensus Estimate of $3,434.4 million and fell 7.4% year over year. The downfall was due to declines in the volume of 25% in Integrated Capacity Solutions (ICS), 5% in Intermodal (JBI) and 17% in Final Mile Services (FMS), respectively. A decline of 17% in revenue per load in Truckload (JBT) added to the woes.

Revenue declines in ICS, JBI, FMS and JBT were partially offset by Dedicated Contract Services revenue growth of 13%. JBHT’s total operating revenues, excluding fuel surcharges, decreased 10.2% year over year.

Delta Air Lines’ DAL first-quarter 2023 earnings (excluding 82 cents from non-recurring items) of 25 cents per share missed the Zacks Consensus Estimate of 29 cents. Volatile fuel prices and unfavorable weather conditions led to this downtick. DAL reported a loss of $1.23 per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.

DAL reported revenues of $12,759 million, which missed the Zacks Consensus Estimate of $12,767.4 million. However, driven by higher air-travel demand, total revenues increased 36.49% on a year-over-year basis.

Alaska Air Group, Inc. ALK reported first-quarter 2023 loss of 62 cents per share, wider than the Zacks Consensus Estimate of a loss of 48 cents. In the year-ago quarter, ALK incurred a loss of $1.33.

ALK’s operating revenues of $2,196 million missed the Zacks Consensus Estimate of $2,202.5 million. However, the top line jumped 31% year over year, with passenger revenues accounting for 90.3% of the top line and increasing 31% due to continued recovery in air-travel demand.

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