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MarketWatch First Take: Airline stocks climb after American Airlines raises revenue outlook


Airline stocks climbed before market open on Tuesday after American Airlines raised its third-quarter revenue outlook.

American Airlines Group Inc.

expects third-quarter revenue to be up approximately 13% compared with the same period in 2019, before the pandemic hit. The company’s previous guidance was for a rise of 10% to 12%. Analysts surveyed by FactSet have forecast revenue consensus of $13.31 billion, which implies 11.7% growth.

The carrier also raised its outlook for total revenue per available seat mile (TRASM) to 25%, compared with its previous guidance of up 20% to 24%. American Airlines said that cost per available seat mile (CASM) is expected to be up 14%, above its previously expected range of 12% to 14%.

American Airlines’ stock climbed 4.7% on the raised outlook. Shares of the carrier have fallen 32.9% this year, compared with a 27.4% decline on the U.S. Global Jets ETF

and the S&P 500 Index’s

fall of 24.2%.

See Now: American Airlines stock jumps after revenue outlook raised

The carrier’s guidance raise also lifted other airline stocks. Shares of Delta Air Lines Inc.,
which reports third-quarter results before market open on Oct. 13, rose 3% on Tuesday. The company’s stock has fallen 24.7% in 2022. Analysts surveyed by FactSet are looking for third-quarter earnings of $1.53 a share, or $1.54 a share excluding items, on net income of $998 million. Sales are expected to be $12.898 billion, according to analysts.

Shares of United Airlines Holdings Inc.

rose 2.8% before market open on Tuesday. The company’s stock has declined 21.9% this year.

United Airlines reports its third-quarter results after market close on Oct. 18, with a conference call the next day. In July United delivered its first profitable quarter since the start of the pandemic in 2020, despite fuel prices hitting record highs.

Last month United Airlines raised its third-quarter revenue growth outlook, citing “strong” demand at the end of a “robust” summer.

See Now: Airlines enter earnings season wrestling with fuel prices, hiring challenges

Analysts surveyed by FactSet are looking for earnings of $2.22 a share, or $2.25 a share excluding items, on net income of $745 million. Sales are expected to be $12.729 billion.

Shares of JetBlue Airways Corp., which have fallen 54.4% in 2022, rose 1.8% before market open.

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