American Airlines forecast first-quarter profit lower than Wall Street estimates, primarily due to higher labor and fuel costs. The stock is down 5% in early trading on the Nasdaq, after gaining 13% this year through Tuesday.
On an adjusted basis, American expects quarterly earnings per share in the range of 1 to 5 cents, compared to Bloomberg’s average 4.6 and Refinitiv’s estimates of 6 cents per share. Preliminary revenue is $12.19 billion, in line with analyst expectations of $12.21 billion.
The carrier slightly lowered its first-quarter fuel price guidance from the $3.33-$3.38 a gallon range to the new $3.27-$3.32 range.
The company’s forecast comes about a month after rival United Airlines estimated a loss in the first quarter citing similar reasons. Rising personnel and fuel costs were partially offset by higher fares, thanks to increased demand for air travel. However, there has recently been a slowdown in weekly bookings and investors will be closely monitoring demand in the spring and summer, the busiest time for travel.