Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

American Airlines second-quarter earnings: just how bad was the lockdown?

American Airlines is hoping to put a disastrous second quarter behind it, yet investors will be watching with anticipation to see exactly how damaging the period was for the airline

American airlines Source: Bloomberg

When is the American Airlines earnings date?

The second-quarter (Q2) American Airlines earnings date is scheduled for 23 July.

American Airlines earnings – what does Wall Street expect?

American Airlines have endured a torrid Q2, with the company building on an already tough Q1 to reflect what is likely to be possibly the worst three-month period in living memory.

With coronavirus lockdowns in place around the world, and with US travel restricted heavily throughout the period in question, a huge decline in financials are almost guaranteed. Markets currently expect to see an American Airlines earnings per share (EPS) net loss of $7.27; down from a negative $2.27 EPS in Q1.

Revenues are also expected to suffer, with the Q1 figure of $8.51 billion expected to shrink 88% to result in an American Airlines revenue figure closer to $1.35 billion. Following years of steady revenue growth, Q2 is expected to be the worst for the airline as operations ground to a halt. Therefore, while these numbers are undoubtedly going to be shocking by historical standard, it is widely expected that this will be the bottom for a company that hopes to stage a recovery in the second half of the year.

Unfortunately this period is likely to be a financial strain, with the company expected to post a second consecutive quarter of losses. With many believing that we could see an airline go bust throughout this crisis, the size of the loss will be crucial. As things stand, markets are expecting a pre-tax loss of $3.8 billion, with the post-tax net income predicted to show a loss of $2.98 billion.

How to trade American Airlines Q2 results

At present, of the 18 analysts covering American Airlines, four have ‘buy’ recommendations, while there are six ‘holds’ and eight ‘sells’. The median target price is $13.00, around 9% higher than the current price of $11.93.

The week that followed the Q1 results witnessed a decline of 19.7% for the stock price.

American Airlines share price: technical analysis

After a sharp rally in early June, we have seen the stock tumble into the 76.4% Fibonacci support level at $11.68. This recent pullback could be a buying opportunity if we see earnings outperform, with a drop back below the May low of $8.25 required to highlight the possibility that the worst is not over for the stock.

Until then, the declines we are currently seeing could be a buying opportunity for those that believe that company will emerge out the other side in a strong position.

American Airlines daily price Source: ProRealTime
American Airlines daily price Source: ProRealTime

Looking at the four-hour chart, we can see a downtrend in play, with the price heading lower once more. With that in mind, any bullish positions would be preferred upon seeing a break through the previous swing high (currently $14.28). Until then, short-term declines could persist.

American Airlines 4 hour Source: ProRealTime
American Airlines 4 hour Source: ProRealTime

American Airlines losing altitude

With Q2 losses expected to be pretty hefty, investors will be keeping a close eye out for exactly how much the lockdown hurt the firm. Given current declines across the sector, fears over the potential for further lockdowns in the US are certainly hurting sentiment around the reopening of both domestic and international flight routes.

With growth stocks significantly outperforming value over the course of this crisis, we may need some fairly concrete improvements to bring confidence that this stock is going to establish a strong uptrend from here.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.

Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access
Learn more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Tuesday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.