Investing.com -- Shares in American Airlines (NASDAQ:AAL) slumped by more than 8% in premarket trading on Wednesday after the carrier warned that it expects to earn less per share in the current quarter.
The company lowered its forecast for second-quarter earnings per share to between $1.00 to $1.15, down from $1.15 to $1.45 previously. Total revenue per available seat mile, or TRASM, is also now expected to fall by 5% to 6%, versus a prior estimate for a decline of 1% to 3%.
"American’s [second-quarter] revenue guidance likely had more ambitious underlying assumptions (vs. peers) when it was first provided," analysts at Evercore ISI said in a note to clients.
Quarterly flying capacity is now forecast to match the corresponding three-month period in 2023. American had said that the number would increase by 7% to 9%.
Its guidance for operating margins was also slashed to a range of 8.5% to 10.5%, down from 9.5% to 11.5%, despite the group lowering its estimates for fuel expenses and cost per available seat mile.
Meanwhile, the firm announced the departure of Chief Commercial Officer Vasu Raja in June. Some market observers argued said the move might raise questions around American's "strategic positioning."
"[I]t's clear [American]'s [long-term] strategy will take some time to execute," analysts at Jefferies said in a note ratcheting down their rating of the company to "Hold" from "Buy."
Yasin Ebrahim contributed to this report.