American Airlines stock tumbled early Thursday and looked set to wipe out all of its 2025 gains.
At first glance, the carrier’s earnings were good — revenue came in at a fourth-quarter record of $13.7 billion, securing record annual revenue of $54.2 billion. Earnings of 84 cents per share in the quarter also beat analysts’ estimates of 66 cents, according to FactSet.
But a strong recent rally for airline stocks means investors are in no mood to tolerate any disappointments. American’s first-quarter guidance looks like a misstep the market isn’t prepared to forgive.
The carrier expects an adjusted loss of between 40 cents and 20 cents per share, steeper than the 4 cents per share loss estimated by Wall Street. It cited current demand trends and fuel price forecasts. The global average jet fuel price has jumped 12% in the past month, according to the International Air Transport Association.
Still, that’s a factor that impacts all airlines and United Airlines and Delta Air Lines both managed to top guidance estimates earlier this month.
American stock pointed more than 9% lower in premarket trading Thursday. Heading into the day, the stock was up 7% so far in 2025 and 33% over the past 12 months.
Shares of Alaska Air, which reported earnings late Wednesday, were faring better. The company impressed investors with an earnings and revenue beat and upbeat guidance. It also posted record annual revenue of $11.7 billion.
The stock, which has been one of the sector’s best performers — rising 88% over the past year — jumped 2.4% ahead of the open Thursday.
CEO Ben Minicucci said 2024 was a “transformational year” for the company as it completed the acquisition of Hawaiian Airlines. He added that the merger will unlock $1 billion in incremental pretax profit over the next three years.
The low-cost airline’s forward guidance suggests Alaska will get off to a good start in 2025. It expects unit revenue to rise by a high single-digit percentage in the first quarter, while it guided for a loss of between 50 cents and 70 cents per share — narrower than the 75 cents forecast by analysts.