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American Airlines Climbs on Estimate of Pretax Profit

American Airlines estimates that second-quarter cash flow was positive. That would be its first report of positive cash flow since the pandemic started.

American Airlines  (AAL) - Get American Airlines Group, Inc. Report rose Wednesday after the country's biggest air carrier estimated that it would report a "slight" pretax profit within its earnings statement scheduled for next week.

American said in a regulatory filing that its net result would range between a $35 million loss and a $25 million profit.

Shares of the Fort Worth, Texas, company at last check were up 2.6% at $20.54.

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The company also estimates that second-quarter cash flow was positive. That would be its first report of positive cash flow since the pandemic started and global travel came to a virtual halt.

The company reduced its daily cash-burn rate from about $100 million a day in April 2020 to $27 million a day in the fourth quarter, American reported.

American also posted a modestly wider-than-expected first-quarter loss.

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The company said it flew 44 million passengers over the three months ending in June, over five times more than in the year-earlier period.

“We are clearly moving in the right direction,” Chief Executive Doug Parker and President Robert Isom said in a message to employees, according to Bloomberg.

“Our revenue and expense performance in the quarter came in better than expectations, and this was achieved while bringing the operation back up to full capacity and safely transporting a record number of travelers.”

American said it expects to end the second quarter with about $21.3 billion in total available liquidity, roughly $1.3 billion higher than prior guidance.

The airline cited continued improvements in revenue production, forward bookings and about $145 million in shares issued under the company’s at-the-market facility. Roughly $650 million of the at-the-market authorization remains available, the company said.

Citi upgraded the airline to neutral from sell after the update.

Separately, Delta Air Lines DAL posted a narrower-than-expected second-quarter loss and said a pickup in business and leisure travel demand would lift the air carrier into profitability over the second half of the year.