American Airlines will likely report its earnings for the second quarter of fiscal 2020 before the market opens on July 23. All of the airlines will likely report a drastic decline in their revenue and higher losses in the second quarter. The effect of the COVID-19 pandemic was more visible in the second quarter due to stricter travel restrictions.
What to expect from American Airlines’ Q2 results
Analysts expect an 87.9% YoY (year-over-year) decline in the company’s revenues to $1.4 billion. Sequentially, the estimate is a hard fall from revenue of $8.5 billion in the first quarter. The revenue could increase towards the third and fourth quarters. American Airlines’ revenue could be around $3.8 billion and $5.8 billion in the third and fourth quarters. For fiscal 2020, the revenue could see a 57.4 percent decline to $19.4 billion.
The losses for the second quarter could be higher at $7.5 per share compared to a profit of $1.82 per share in the second quarter of 2019. American Airlines’ losses could be lower at $4.46 and $2.41 per share in the third and fourth quarters. For fiscal 2020, American Airlines could report a loss of $16.9 per share compared to a profit of $4.9 per share in fiscal 2019.
United Airlines and Spirit Airlines will also report their second-quarter earnings this week. United could report revenue of $1.3 billion and a loss of $9.02 per share. Spirit Airlines could report revenue of $108.3 million and a loss of $2.66 per share. Spirit Airlines also announced plans of possible furloughs in August due to the steep losses.
American Airlines' stock performance
Currently, 18 analysts cover American Airlines stock. Among the analysts, six recommend a hold, six recommend a sell, three recommend a buy, one recommends a strong-buy, and two recommend a strong sell. The consensus target price is $12.47, which indicates an upside potential of 9 percent from the last closing price. The stock closed 3.6 percent lower at $11.47 on Monday.
Airline stocks got a boost last week after the results for the COVID-19 vaccine clinical trial. Moderna reported positive results from its Phase 1 trial, which benefited most travel industry stocks. Amid rising COVID-19 cases in the U.S., travel demand fell again last week. A Market Watch report said, “The daily average number of travels going through TSA checkpoints for the week ended Sunday was 664,022, down from 694,489 the week before.”
As of July, American Airlines stock has fallen 10.4 percent, while Spirit and United stocks have fallen 6.0 percent and 6.1 percent, respectively. So far, Alaska Air has gained 0.53 percent in July.
Stay with us to learn how American Airlines and other airlines performed in the second quarter.