Why American Airlines Stock Tumbled Today
American Airlines beat on sales and earnings this morning.
Revenues held steady year over year, but profits declined 10%.
American Airlines says it will lose money in Q3, and could lose money for the full year as well.
10 stocks we like better than American Airlines Group ›
American Airlines (NASDAQ: AAL) stock sank 7.2% through 10:55 a.m. ET Thursday despite reporting an earnings beat for Q2 this morning.
Analysts forecast the airline company would earn $0.77, adjusted for one-time items, on $14.3 billion in Q2 sales. In fact, the airline earned $0.95 on sales of $14.4 billion.
American Airlines Q2 earnings
What's bad about that? Combing through the numbers, here's what we find: Earnings as calculated according to generally accepted accounting principles (GAAP) were lower than the adjusted figure of $0.91. This was down 10% from what AA earned a year ago, despite quarterly revenue remaining roughly flat.
So obviously, profit margins declined. But why? Well, fuel costs were lower in Q2 2025 than a year ago, but salaries, wages, and benefits cost 11% more, and landing fees grew 7%. Those were among the biggest changes that stand out.
Is American Airlines stock a sell?
I doubt these costs are what's upset investors today, however. Looming larger are concerns about "macro weaknesses" in the economy that are affecting company guidance.
Although American Airlines management says it doesn't necessarily see a reason to worry right now, it worries anyway -- and after reporting its big Q2 profit, told investors it might lose as much as $0.60 per share in Q3, while full-year results could be as good as a $0.80 per-share profit... or as bad as a $0.20 per-share loss.
That's a pretty wide range of potential outcomes for the year, and the only thing AA seems certain of is that it will definitely lose money in the current quarter. With a market cap of only $7.8 billion but more than $ 28 billion in debt and losses on the horizon, maybe investors should worry about AAL stock, too.
Should you invest $1,000 in American Airlines Group right now?
Before you buy stock in American Airlines Group, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and American Airlines Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $634,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,046,799!*
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*Stock Advisor returns as of July 21, 2025
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