Key Takeaways
- Analysts estimate adjusted EPS of -$1.01 vs. -$5.54 in Q3 FY 2020.
- Load factor is expected to rise sharply YOY, but to remain below peak levels.
- Revenue is expected to nearly triple amid a rebound in travel demand from last year’s pandemic-depressed levels.
American Airlines Group Inc. (AAL), like the rest of the industry, has enjoyed a resurgence in travel demand in 2021 after it was decimated last year amid the worst phase of the COVID-19 pandemic. The vaccine rollout has largely reversed that trend and led to a speedy recovery in air travel. But American Airlines, nonetheless, has lost some momentum in recent months as the fast-spreading Delta variant has deterred some people from traveling.
Investors will be watching closely how rapidly American Airlines is recovering financially when the company reports earnings on Oct. 21, 2021 for Q3 FY 2021. Analysts estimate that the company will report a seventh straight quarter of adjusted losses per share, but the Q3 loss is expected to be by far the smallest one out of those seven periods. Revenue is expected to rise at a rapid pace as it rebounds from the depressed levels during the worst of the COVID-19 pandemic last year.
Investors will also be focusing on American Airlines’ load factor, a key metric used by air carriers to gauge what percentage of paid-passenger seating capacity is being filled. Analysts expect the carrier’s load factor to increase substantially compared to the year-ago quarter, when it was severely depressed due to the pandemic.
Shares of American Airlines have outperformed the broader market over the past year. However, the stock has retreated since reaching a recent peak in early June after rising for most of the first half of the year on optimism over the pickup in travel demand. American Airlines’ shares have provided a total return of 63.4%, more than double the 28.4% total return of the S&P 500.
Source: TradingView.