American Airlines trims EPS guidance for Q3 in less than half

American Airlines Group Inc (NASDAQ: AAL) just joined peers in trimming its expectations for the summer quarter. Shares of the air carrier are down 5.0% at writing.

American Airlines’ updated guidance for its Q3

The airline holding company now forecasts its per-share earnings to fall between 20 cents to 30 cents only. It had previously guided for a sharply higher 95 cents a share.

Much like other carriers, American Airlines blamed higher costs and a recent labour deal with pilots for the lowered outlook. According to its filing with the Securities & Exchange Commission on Wednesday

Fuel prices have increased considerably since the Company’s initial Q3 guidance. The Company now expects to pay an average of between $2.90 and $3.0 per gallon of jet fuel in Q3.

Shares of American Airlines have now lost nearly 30% in two months.

American Airlines cuts operating margin forecast in half

American Airlines expects its revenue to still come in roughly in line with its previous outlook. But operating margin is now seen coming in at 4.0% to 5.0% in the third quarter versus double that it had guided for earlier.

Heading into today’s announcement, consensus was for the Texas-based company to earn 75 cents per share in Q3. It had earned 69 cents per share in the same quarter last year.  

On Wednesday, Spirit Airlines also warned that its revenue will come in shy of its previous estimate. The budget airline now sees margins to print at negative 15.5% (at worst) in its Q3.

Shares of the Florida-based air carrier are also down 3.0% at writing.