AAL American Airlines Group Inc

By Patrick Thomas 

American Airlines Group Inc. said Thursday that the continued grounding of Boeing Co.'s 737 MAX airplanes and other operational challenges from labor contract negotiations weighed on its results and annual outlook.

The carrier said it now expects the MAX cancellations will hurt its full-year pretax income by about $540 million. American's 24 Boeing 737 MAX jets have been grounded since March, crimping its growth plans.

The company lowered the high-end of its full-year adjusted earnings guidance to $5.50 a share from $6 a share. The low-end of the range is $4.50 a share.

The Fort Worth, Texas, carrier reported a profit of $425 million, or 96 cents a share, compared with $372 million, or 81 cents a share, a year ago.

The company reported adjusted earnings of $1.42 a share. Analysts polled by FactSet were expecting earnings of $1.33 a share, or $1.40 a share on an adjusted basis.

Revenue rose to $11.91 billion from $11.56 billion a year earlier, driven by stronger passenger demand. Analysts had expected $11.94 billion of revenue in the quarter.

"We know that our results should have been better," Chief Executive Doug Parker said in a statement. "Our third quarter was impacted by the continued grounding of the Boeing 737 MAX and the operational challenges resulting from ongoing labor contract negotiations.""

Shares of the company were off 1% during premarket trading.

The airline reshuffled some executives earlier this month as it faces operational issues that has hurt its reputation and weighed on shares in recent months.

Write to Patrick Thomas at Patrick.Thomas@wsj.com

(END) Dow Jones Newswires

October 24, 2019 08:14 ET (12:14 GMT)

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