The Fort Worth, Texas, company estimated an adjusted net loss per share of 96 cents to $1.04, stronger than the $1.22-a-share loss forecast by analysts surveyed by FactSet.
And it estimated revenue dropped 25% in the quarter from the pre-pandemic third quarter of 2019. That compares with the FactSet analyst consensus of a 26.3% decline and American’s earlier guidance of a 25% to 28% drop.
The company’s stock on Tuesday closed at $20.29, up 0.8%. It has fallen 15% over the past six months as the pandemic has continued to stifle flying demand.
American anticipates capacity declined 19% in the third quarter, compared with its prior projection of 15% to 20%. It estimated an average fuel price of $2.08 a gallon for the quarter, down from its prediction of $2.10 to $2.15.
Last week, Goldman Sachs analyst Catherine O'Brien downgraded American Airlines to sell from neutral and cut her price target to $18 from $19. “Its higher operating leverage weighs on its profitability recovery in the weaker industry pricing environment we are expecting,” she said.
Morningstar analyst Burkett Huey puts fair value at $19 for American.
“No-moat American Airlines reported significant revenue improvement in the second quarter, as domestic leisure travel has recovered quickly and business travel begins to recover in earnest,” he wrote in July.
“We are maintaining our $19-per-share fair-value estimate as we increase short-term estimates for capacity and load factors, though this is partially offset by higher oil prices and a higher effective tax rate.”