American Airlines raised its annual forecast for adjusted profit on Thursday thanks to increasing demand for domestic and international travel.
The airline now said it expects an adjusted profit of $3 to $3.75 per share for 2023 compared with its prior outlook of $2.50 to $3.50 per share.
The carrier reported a record quarterly revenue of $14.1 billion on Thursday, a 4.7% increase from the prior year.
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American and its regional partners operated nearly 500,000 flights throughout the second quarter, with an average load factor of approximately 86%, according to the airline.
The air carrier also delivered a record percentage of scheduled departures over the Memorial Day weekend, with momentum continuing into a record June for scheduled departures and controllable completion factor.
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"Our operation is performing at historically strong levels, and we have worked to refresh our fleet and build a comprehensive global network, all of which helped to produce record revenues in the second quarter," American Airlines CEO Robert Isom said in a statement. "We will build on this momentum the rest of the year and continue to prioritize reliability, profitability, accountability and strengthening our balance sheet."
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Despite the profit boost, shares of American Airlines are down on Thursday. However, shares for the airline have taken off since Jan. 1, gaining around 37%.
While the stock value has risen sharply in the last 12 months, analysts at Barclays don’t expect the shares to hold their current trajectory.
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Analysts have maintained their underweight rating, saying it reflected the airline’s industry-high in financial leveraging that presents the greatest uncertainty and relative risk under the current environment.
According to Barclays, risks specific to American could include the carrier's inability to pass along cost inflation in the form of price, which can further dilute margins.
