AAL Cover Image
American Airlines (NASDAQ:AAL) Posts Better-Than-Expected Sales In Q4 But Stock Drops

Global airline American Airlines (NASDAQ:AAL) announced better-than-expected revenue in Q4 CY2024, with sales up 4.6% year on year to $13.66 billion. Its non-GAAP profit of $0.86 per share was 30.1% above analysts’ consensus estimates.

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  • Revenue: $13.66 billion vs analyst estimates of $13.42 billion (4.6% year-on-year growth, 1.8% beat)

  • Adjusted EPS: $0.86 vs analyst estimates of $0.66 (30.1% beat)

  • Adjusted EPS guidance for the upcoming financial year 2025 is $2.20 at the midpoint, missing analyst estimates by 10.1%

  • Operating Margin: 8.3%, up from 5% in the same quarter last year

  • Revenue Passenger Miles: 60.68 billion, up 2.35 billion year on year (1.0% beat vs expectations of 60.02 billion)

  • Market Capitalization: $12.26 billion

“The American Airlines team achieved a number of important objectives in 2024,” said American’s CEO Robert Isom.

One of the ‘Big Four’ airlines in the US, American Airlines (NASDAQ:AAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.

Airlines, hotels, resorts, and cruise line companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted from buying “things” (wasteful) to buying “experiences” (memorable). In addition, the internet has introduced new ways of approaching leisure and lodging such as booking homes and longer-term accommodations. Traditional airlines, hotel, resorts, and cruise line companies must innovate to stay relevant in a market rife with innovation.

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, American Airlines grew its sales at a sluggish 3.4% compounded annual growth rate. This was below our standard for the consumer discretionary sector and is a tough starting point for our analysis.

American Airlines Quarterly Revenue
American Airlines Quarterly Revenue

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new property or trend. American Airlines’s annualized revenue growth of 5.2% over the last two years is above its five-year trend, but we were still disappointed by the results.

American Airlines Year-On-Year Revenue Growth
American Airlines Year-On-Year Revenue Growth

American Airlines also discloses its number of revenue passenger miles, which reached 60.68 billion in the latest quarter. Over the last two years, American Airlines’s revenue passenger miles averaged 7.7% year-on-year growth. Because this number is higher than its revenue growth during the same period, we can see the company’s monetization has fallen.

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