American Airlines scales back 2025 profit outlook as third-quarter forecast falls short

American Airlines shares slumped Thursday after the carrier's third-quarter profit forecast fell short of Wall Street's expectations and it reinstated its 2025 financial forecast well below its outlook at the start of the year.

CEO Robert Isom told CNBC's "Squawk Box" that the results are driven by consumer weakness, flat corporate travel demand that continued into the start of the summer and operational problems from a series of storms.

"July's been a tough month … because of the domestic consumer weakness," Isom said.

Demand appears better in the coming months, he said, and American is scaling back its capacity growth.

Delta Air Lines and United Airlines earlier this month said travel demand has stabilized, though both carriers issued lower 2025 forecasts than at the beginning of the year.

American on Thursday forecast a 2025 adjusted per-share loss of as much as 20 cents or earnings of as much as 80 cents, down from adjusted earnings estimates of between $1.70 to $2.70 it made in January. American, along with other airlines, pulled its 2025 financial outlook in April as carriers grappled with on-again-off-again tariffs and weaker-than-expected domestic demand.

For the third quarter, American said it expects an adjusted per-share loss of 10 cents to 60 cents, while analysts polled by LSEG estimated a 7 cent loss.

The airline said in an earnings release that it only expects the low-end of its forecast if "there were to be macro weaknesses that are not seen today" and the high end if the domestic travel market continues to improve.

Domestic travel demand has been a weak spot this year, though many U.S. travelers have continued to fly abroad in droves to popular destinations like Japan and Italy. American's passenger revenue per available domestic seat mile, a pricing power gauge, was down more than 6% in the second quarter, while it was up nearly 3% for international.

Here is how American performed in the second quarter compared with Wall Street estimates compiled by LSEG:

In the three months ended June 30, American's revenue rose 0.4% to $14.39 billion, ahead of expectations, while net income dropped 16.5% to $599 million, or 91 cents a share. Adjusting for one-time items, American posted earnings of $628 million, or 95 cents a share, well ahead of analysts' expectations.

Correction: This story has been updated to correct the earnings per share for the second quarter.