Why American Airlines Stock Is Losing Altitude Today

Group 1: Financial Performance - American Airlines reported earnings of $0.86 per share on sales of $13.7 billion, exceeding Wall Street's expectations of $0.66 per share on $13.4 billion in sales [2] - The airline generated $2.2 billion in free cash flow in 2024, achieving its goal of $15 billion in total debt reduction a year ahead of schedule [3] - For the first quarter, American Airlines forecasts a loss between $0.20 and $0.40 per share, which is worse than the expected loss of $0.06 per share [4] Group 2: Future Outlook - American Airlines expects to earn between $1.70 and $2.70 per share for the year, indicating potential downside to the consensus estimate of $2.42 per share [4] - The company anticipates generating over $2 billion in free cash flow again in 2025 and aims to reduce total debt below $35 billion by the end of 2027, a year ahead of its original plan [6] - The airline plans to take delivery of 40 to 50 new aircraft in 2025, which is expected to result in approximately $200 million in cost savings [6] Group 3: Market Reaction - Following the quarterly results, American Airlines' shares dropped as much as 10% for the day and were down 8% as of 12:30 p.m. ET [1] - Despite the recent decline, the stock has increased by 60% over the last six months [5] - Analysts suggest that the stock performance may have outpaced operational realities [5] Group 4: Management Commentary - CEO Robert Isom highlighted the achievement of important objectives in 2024 and emphasized the focus on building a more efficient airline [4] - The company remains committed to debt reduction and maintaining strong operational reliability [4][7]