American Airlines (AAL) Has Fallen 0.9% Since Its Most Recent Earnings Release: Is a Recovery Possible?

American Airlines: Recent Performance and Outlook

In the past month, American Airlines (AAL) shares have declined by approximately 0.9%, lagging behind the S&P 500 index.

As the company approaches its next earnings announcement, investors are questioning whether this downward momentum will persist or if a turnaround is on the horizon. To better understand the current situation, let's review the latest quarterly results and examine the factors influencing American Airlines Group Inc., as well as recent reactions from analysts and investors.

Fourth Quarter 2025 Earnings Overview

For the fourth quarter of 2025, American Airlines reported adjusted earnings of $0.16 per share, falling short of the Zacks Consensus Estimate of $0.38. This is a notable decrease from the $0.86 per share reported in the same period last year. Revenue for the quarter reached $14 billion, missing expectations of $14.1 billion but marking a 2.5% increase year-over-year. The extended government shutdown negatively impacted revenue by roughly $325 million. Passenger revenue, which made up 90.4% of total revenue, grew 2.1% to $12.7 billion. Cargo revenue rose 2.8% to $226 million, while other revenue streams increased 7.4% to $1.1 billion.

Revenue per available seat mile, a key industry metric, dropped to 18.8 cents from 19.1 cents a year earlier. Passenger revenue per available seat mile declined by 2% to 17 cents, coming in below expectations. On the other hand, consolidated yield edged up 0.5% to 20.55 cents, surpassing estimates.

Overall traffic, measured in revenue passenger miles, increased by 1.5% year-over-year, while capacity expanded 4.2%. The load factor, which reflects the percentage of seats filled, decreased by 2.2 points to 82.7%.

Total operating expenses surged 8.2% to $13.5 billion, driven by a 9.7% rise in salaries, wages, and benefits to $4.5 billion, partly due to a new pilot contract signed in 2023. Fuel and related taxes increased 8% to $2.7 billion, with the average fuel price per gallon rising to $2.42 from $2.34. Excluding fuel and special items, operating costs per available seat mile climbed 3.7% to 14.51 cents. Fuel consumption grew 4.1% to $1.11 billion for the quarter. The company ended the period with $9.2 billion in available liquidity.

Winter Storm Fern's Impact on Q1 2026

American Airlines has provided preliminary guidance reflecting the effects of Winter Storm Fern, which has led to the cancellation of over 9,000 flights. As a result, the company anticipates a 1.5-point reduction in capacity, a negative revenue impact between $150 million and $200 million, and a 1.5-point increase in non-fuel unit costs for the first quarter of 2026.

Looking ahead, management expects first-quarter 2026 capacity to rise 3-5% compared to the same period in 2025, with total revenue projected to increase by 7-10%. Adjusted cost per available seat mile is forecasted to grow 3-5%. Due to elevated costs and weather disruptions, the company expects a per-share loss ranging from $0.10 to $0.50 for the quarter. For the full year 2026, American Airlines anticipates earnings per share between $1.70 and $2.70, free cash flow exceeding $2 billion, and adjusted nonoperating expenses around $1.25 billion.

Recent Estimate Revisions

Since the latest earnings report, analyst estimates for American Airlines have generally trended higher.

VGM Score Breakdown

American Airlines currently holds a Growth Score of D, but its Momentum Score stands at A. The stock also receives an A for Value, placing it among the top performers for value-focused strategies.

Overall, the company earns an aggregate VGM Score of A, making it attractive for investors who do not prioritize a single investment approach.

Future Prospects

Analyst estimates for American Airlines have mostly moved upward, though the scale of these changes suggests a neutral outlook. The stock holds a Zacks Rank #3 (Hold), and is expected to deliver average returns over the coming months.

Industry Comparison: United Airlines

American Airlines operates within the Zacks Transportation - Airline sector. United Airlines (UAL), another major player in the industry, has seen its stock rise 7.6% over the past month. United's most recent quarterly results, covering the period ending December 2025, showed revenue of $15.4 billion, up 4.8% year-over-year, and earnings per share of $3.10, compared to $3.26 a year earlier.

For the current quarter, United is expected to report earnings of $1.31 per share, representing a 44% increase from the prior year. Over the past 30 days, the Zacks Consensus Estimate for United has remained unchanged. United Airlines also holds a Zacks Rank #3 (Hold) and boasts a VGM Score of A.