American Airlines Shares Drop After Weak Q3 and Full-Year Guidance Despite Strong Q2 Results

Jul 24, 2025

American Airlines reported strong financial results for the second quarter of 2025, with earnings and revenues that beat Wall Street expectations. The company earned $0.95 per share in Q2, which was higher than the estimated $0.79 per share, although down from $1.09 per share a year ago.

Despite the positive second-quarter performance, the airline's stock dropped nearly 10% on Thursday. This was mainly due to the company warning of a possible loss in the upcoming third quarter, citing weaker domestic travel demand and continued uncertainty among consumers. American Airlines forecasted an adjusted loss of $0.60 to $0.10 per share for Q3, which was much lower than analysts' expectations of a $0.76 profit.

The company also reinstated its full-year 2025 earnings guidance, now expecting anything from a loss of $0.20 per share to a profit of $0.80 per share. This wide range was attributed to ongoing economic uncertainty and reduced consumer spending on travel. The midpoint of this outlook falls well short of the $0.72 per share profit expected by analysts.

Chief Executive Robert Isom acknowledged challenges such as softened domestic travel demand and operational disruptions from severe weather, but noted optimism about a possible rebound in travel trends later in the year.

Why did American Airlines stock fall even though it reported strong Q2 results?

The stock dropped because investors were worried about the company's forecast of a possible loss in the next quarter and a weaker full-year guidance than expected.

What were American Airlines’ main challenges mentioned in the outlook?

The company pointed to weaker domestic travel demand, economic uncertainty, and operational disruptions from bad weather.

What is American Airlines expecting for the rest of 2025?

The company expects full-year 2025 earnings to range from a small loss to a modest profit, reflecting uncertainty in the travel market.

Sources
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