These 2 Top Food, Travel Stocks Dive As Outlook Deteriorates
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Diverging Reports Breakdown
American Airlines CFO Declares Worst Is Over, But Cautious Outlook Sinks Stock
American Airlines Group Inc. (NASDAQ:AAL) on Thursday reported second-quarter 2025 earnings and revenue that surpassed Wall Street expectations. The company issued a cautious forecast for the third quarter and narrowed its full-year guidance, citing ongoing uncertainty in travel demand. American posted net income of $599 million, or 91 cents per share, highlighting operational strength despite economic pressures and weather-related disruptions across its network. At check-out Thursday, AAL shares were trading lower by 9.63% at $11.46. The airline ended the quarter with 1,539 aircraft in its fleet and 138,100 full-time equivalent employees, slightly higher than the year-ago period. It generated $3.42 billion in operating cash flow through the first half of the year and reported $2.48 billion in free cash flow. Total debt stood at $38 billion, with net debt of $29 billion.
However, the company issued a cautious forecast for the third quarter and narrowed its full-year guidance, citing ongoing uncertainty in travel demand.
The airline reported an adjusted earnings per share of 95 cents, beating the consensus estimate of 77 cents. Revenue for the quarter rose slightly to $14.39 billion, edging past analyst expectations of $14.3 billion.
Also Read: American Airlines Leverages Mastercard Analytics For New Era Of Customized Travel Rewards
On a GAAP basis, American posted net income of $599 million, or 91 cents per share, highlighting operational strength despite economic pressures and weather-related disruptions across its network.
American said the results were driven by strong international and premium cabin performance, growth in its loyalty program, and disciplined cost management.
Passenger unit revenue in Atlantic markets climbed 5% from the year-ago quarter, while co-branded credit card spending rose 6%. The company also saw a 7% increase in AAdvantage loyalty program enrollments.
The company generated $3.42 billion in operating cash flow through the first half of the year and reported $2.48 billion in free cash flow, helping bring its total available liquidity to $12 billion at the end of the quarter. Total debt stood at $38 billion, with net debt of $29 billion.
CEO Robert Isom said the airline is well-positioned to navigate current volatility due to its modernized fleet, loyalty initiatives, and a strengthened balance sheet.
American noted that disruptive weather events in key hubs impacted operations during the quarter, though the airline said it maintained reliability amid a 36% increase in such incidents.
The company recently introduced new loyalty features, including the ability to use miles for upgrades, and expanded premium offerings such as its Flagship Suite inflight experience and Flagship Lounge in Miami.
American Airlines reported modest growth in core operational metrics for the second quarter of 2025, with available seat miles (ASM) rising 3.2% year-over-year and revenue passenger miles (RPM) up 0.9%, signaling steady demand and strategic capacity increases.
However, the passenger load factor declined by 1.9 percentage points to 84.7%, indicating slightly lower aircraft occupancy amid expanded service levels.
The carrier saw some pricing pressure, as passenger yield dipped 1.5% to 19.96 cents, and passenger revenue per ASM fell 3.6% year-over-year. Despite the decline in unit revenue, American benefited from a 15.3% drop in average fuel prices, helping reduce overall operating cost per ASM (CASM) by 0.8%, with CASM ex-fuel and special items rising 3.4%.
The airline ended the quarter with 1,539 aircraft in its fleet and 138,100 full-time equivalent employees, slightly higher than the year-ago period.
Outlook
American Airlines expects a third-quarter 2025 adjusted loss per share between $0.10 and $0.60, below the consensus estimate of a $0.03 profit, citing current booking levels, demand trends, and fuel prices.
For the full year, it projects adjusted earnings between a $0.20 loss and $0.80 profit, with a midpoint of $0.30. The company says the upper end is achievable if domestic demand strengthens, while the lower end would only materialize if unexpected macroeconomic weakness emerges.
In the earnings conference call, American Airlines’ CFO reportedly said that the airline anticipates receiving 50 new aircraft deliveries this year. Capacity is expected to increase by 5% during the peak July period. However, this growth is projected to slow to 2% in August and decrease by 1% in September.
The CFO also stated that the worst is over and year-over-year revenue is expected to show sequential monthly improvements throughout the current quarter.
Price Action: At last check Thursday, AAL shares were trading lower by 9.63% at $11.46.
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American Airlines Earnings: What To Look For From AAL
American Airlines (NASDAQ:AAL) will be reporting results this Thursday before the bell. American Airlines has missed Wall Street’s revenue estimates three times over the last two years. Analysts covering the company have grown increasingly bearish with revenue estimates seeing 6 downward revisions in the last 30 days. The company is up 14.9% over the same time and is heading into earnings with an average analyst price target of $13.70 (compared to the current share price of $12.52) The company reported 56.36 billion revenue passenger miles, down 1.9%.
American Airlines met analysts’ revenue expectations last quarter, reporting revenues of $12.55 billion, flat year on year. It was a slower quarter for the company, with a significant miss of analysts’ EBITDA estimates and EPS guidance for next quarter missing analysts’ expectations significantly. It reported 56.36 billion revenue passenger miles, down 1.9% year on year.
Is American Airlines a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting American Airlines’s revenue to be flat year on year at $14.3 billion, slowing from the 2% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.77 per share.
American Airlines Total Revenue
Heading into earnings, analysts covering the company have grown increasingly bearish with revenue estimates seeing 6 downward revisions over the last 30 days (we track 13 analysts). American Airlines has missed Wall Street’s revenue estimates three times over the last two years.
Looking at American Airlines’s peers in the travel and vacation providers segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Carnival delivered year-on-year revenue growth of 9.5%, beating analysts’ expectations by 1.7%, and Delta reported flat revenue, topping estimates by 1.5%. Carnival traded up 5.9% following the results while Delta was also up 11.9%.
Read our full analysis of Carnival’s results here and Delta’s results here.
There has been positive sentiment among investors in the travel and vacation providers segment, with share prices up 13.9% on average over the last month. American Airlines is up 14.9% during the same time and is heading into earnings with an average analyst price target of $13.70 (compared to the current share price of $12.52).
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