- American Airlines stock rebounded after the carrier said it expects its 737 Max jets to be flying again by mid-August.
- The company cut its earnings forecast for the year, citing a major financial hit from the grounding of Boeing’s 737 Max jets and higher fuel prices.
- The carrier expects a hit to pretax earnings of $350 million after grounding its Max fleet and canceling thousands of flights through August. American also expects 2019 adjusted profit to be between $4 and $6 per share.
American Airlines shares rebounded on Friday after the carrier said it expected its Boeing’s 737 Max jets to be back in the air by mid-August.
Earlier, the company cut its earnings forecast for the year, citing a major financial hit from the grounding the Max jets and higher fuel prices. Shares tumble as much as 4%, but had recouped those losses by midday to trade up nearly 1%. Before the stock bounced back, it had been down more than 25% over the last 12 months.
American has grounded its 24 Boeing 737 Max jets through August after the anti-stall software was identified as a likely cause in two fatal crashes in Ethiopia and Indonesia. The roughly 155 canceled flights a day comprise 1.5% of American Airlines’ total capacity per day in the summer.
Here’s what the airline reported, versus average analysts estimates compiled by Refinitiv:
Adjusted earnings: 52 cents vs 51 cents per share forecast
Revenue: $10.58 billion vs $10.59 billion forecast
The grounding is expected to result in a $350 million hit to American’s pretax earnings. The carrier also raised its 2019 fuel cost guidance by $650 million due to higher costs. On an adjusted basis, the company expects to earn between $4 and $6 per share this year.