American Airlines hit by Boeing Max jet grounding
The global grounding of Boeing's 737 Max jets is hammering American Airlines earnings, as the carrier said Friday it expects its full-year profit to be cut by $350 million.
Shares of the airline, which issued the guidance as it reported first-quarter adjusted quarterly profit of 52 cents per share vs. the 51 cents that Wall Street expected, were sharply lower.
Revenue was slightly below analyst expectations at $10.58 billion compared with estimates of $10.59 billion.
The 737 Max jet grounding forced the Texas-based carrier to cancel some 1,200 flights.
Earnings are also expected to be affected by rising aviation fuel prices.
|AAL||AMERICAN AIRLINES GROUP INC.||14.87||+0.17||+1.16%|
"Our near-term earnings forecast has been affected by the grounding of our Boeing 737 MAX fleet, which we have removed from scheduled flying through Aug. 19," CEO Doug Parker said in a statement.
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"We presently estimate the grounding of the 737 MAX will impact our 2019 pre-tax earnings by approximately $350 million. With the recent run-up in oil prices, fuel expenses for the year are also expected to be approximately $650 million higher than we forecast just three months ago."