Why American Airlines Stock Tumbled Today

Key Points

• 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.

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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.

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Image source: American Airlines.

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?

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.