American Airlines (NASDAQ:AAL) stock sank Friday after the carrier lowered its earnings forecast for the year, citing a major financial hit from the ongoing grounding of Boeing’s (NYSE: BA) 737 Max jets and higher fuel prices.
The carrier expects a hit to pre-tax earnings of $350 million after grounding its Max fleet and canceling thousands of flights through August. American also expects 2019 adjusted profit to be between $4 and $6 per share.
Shares of American, which are down 21% in the last 12 months, docked 88 cents, or 2.6%, to $32.53. The shares have risen 4% since the beginning of the year.
The carrier also raised its 2019 fuel cost guidance by $650 million due to higher oil prices.
American has grounded its 24 Boeing 737 Max jets through August after the anti-stall software was identified as problematic in two fatal crashes in Ethiopia and Indonesia. The roughly 155 canceled flights a day comprise 1.5% of its total capacity per day in the summer.
American said that first-quarter net income rose to $185 million, or 41 cents per share, from $159 million, or 34 cents a share, a year earlier.
Adjusted earnings were 52 cents a share, topping analyst estimates by a penny.
Revenue rose 1.8% to $10.58 billion from $10.4 billion a year earlier, slightly missing analyst estimates.
Revenue per available seat mile, a key industry metric, rose by 0.5% to 15.87 cents from a year earlier. Excluding fuel and special items, cost per available seat mile was 11.88 cents, up 2.7% year-over-year.
Boeing shares dropped $1.22 to $381.58.
