American Airlines stock was taking off Thursday, buoyed by the air carrier's forecast of returning to profitability as early as the second quarter of 2022.
For the first quarter of 2022, American (ticker: AAL) posted a loss of $2.52 a share. Excluding special items, the company posted a loss of $2.32 a share, narrower than estimates that called for a loss of $2.39. Revenue was $8.9 billion, above Wall Street forecasts for $8.79 billion, and in line with American's preliminary results that guided for $8.89 billion in revenue.
Despite the loss in the quarter, the company was profitable excluding net special items in March and expects to be profitable in the second quarter. For the first time since the onset of the pandemic, March sales were above 2019 levels.
Based on current trends, the company expects its second-quarter capacity to be approximately 92% to 94% of what it was in the second quarter of 2019, with second-quarter total revenue to be 6% to 8% higher than the second quarter of 2019.
"We're optimistic about the continued recovery in the second quarter and beyond," said CEO Robert Isom. "The demand environment is very strong, and as a result, we expect to be profitable in the second quarter based on our current fuel price assumptions
American stock was soaring 10.4% to $21.50 in premarket trading. The stock is up 8.5% this year.
American's earnings report helps fuel hopes that the travel industry is finally recovering. Travel stocks rallied last week after Delta Air Lines (DAL) posted an earnings beat and indicated it had returned to profitability in March. United Airlines Holdings (UAL), which reported earnings on Wednesday , also guided for a return to profitability in the second quarter and throughout fiscal 2022.