American Airlines Group (AAL) - Get American Airlines Group, Inc. Report posted stronger-than-expected second quarter earnings Thursday but said the grounding of Boeing's (BA) - Get Boeing Company Report 737 MAX will clip full year earnings by around $400 million.
American said adjusted earnings for the three months ending in June came in at $1.82 per share, up 11.65% from the same period last year and 3 cents ahead of the Street consensus forecast. Group revenues, American Airlines said, rose 3.1% to $12 billion, narrowly beating analysts' forecasts of an $11.98 billion tally.
American said it sees full-year earnings, adjusted for special items, in the range of $4.50 to $6.00 per share, a 50 cent improvement at the lower end from the forecast it published earlier this year. The airline also said it would extend the operating life of its A320, B737 and B757 planes in order to offset the ongoing grounding of Boeing's flagship 737 MAX, which will remain cancelled from the airline's rotation until at least November 2.
"Our team members did a tremendous job to deliver solid results despite a challenging start to our summer," said CEO Doug Parker. "Their extraordinary efforts led to an increase in earnings and record revenue performance, and we thank our team for their expertise and care for our customers."
"These strong results in the face of near-term adversity, coupled with our ongoing initiatives, give us great confidence in the future of American Airlines," he added.
American shares were marked 3.12% lower at the opening bell Thursday following the earnings release to change hands at $33.49 each, a move that gives the stock a year-to-date advance of around 7%.