American Airlines reported a third-quarter loss and adjusted its annual profit forecast due in part to increased fuel prices. The carrier now anticipates earning between $2.25 and $2.50 per share for the year on an adjusted basis, down from the previous estimate of $3 to $3.75 in July but largely in line with analyst projections. American also revised its full-year adjusted operating margin to 7%, down from its earlier projection of a margin as wide as 10%. The company foresees breaking even in the fourth quarter.

In the third quarter, American Airlines outperformed Wall Street expectations:

• Adjusted earnings per share: 38 cents (versus an expected 25 cents)
• Total revenue: $13.48 billion (compared to an anticipated $13.52 billion)

Despite a resurgence in travel following the pandemic, especially for international destinations, fares have generally declined compared to the previous year. The airline projects a drop in unit revenue between 5.5% and 7.5% for the fourth quarter year-over-year, with unit costs (excluding fuel) increasing by 5% to 7% compared to the previous year. Additionally, capacity is expected to increase by 4.5% to 6.5% from the same period in 2022.

During the third quarter, American Airlines recorded a loss of $545 million, or 83 cents per share, in contrast to a profit of $483 million, or 69 cents per share, during the same period the previous year. This marked the first loss for the carrier since the first quarter of 2022, with capacity increasing by 7% compared to a year earlier.

In a note to staff, CEO Robert Isom acknowledged challenges, such as significantly higher fuel costs, affecting earnings in the quarter. However, he praised the team's ability to control what is within their power, emphasizing adaptability in any environment.

After adjusting for higher costs associated with the pilots' new labor agreement, the company reported earnings of $263 million, or 38 cents per share, with revenue increasing by 0.1% compared to the same period the previous year.

American Airlines is set to hold a call with analysts and media at 8:30 a.m. on Thursday to discuss its results and outlook.