American shares drop 7% on weak profit forecast after backfired sales plan, industry oversupply

American Airlines is forecasting a drop in unit revenue of as much as 4.5% for the third quarter as high demand failed to make up for an industry-wide glut of flights that have forced airlines to slash fares.

The Fort Worth, Texas-based airline also forecast full-year adjusted earnings of between 70 cents and $1.30 per share, far shy of the $1.10 to $2.60 per share Wall Street analysts were expecting, according to LSEG.

The carrier has been grappling with an industry-wide oversupply of flights and a direct-to-consumer sales strategy it adopted that backfired. It said in an earnings release Thursday that it has "taken swift and aggressive action to reorient its sales and distribution strategy" after complaints from travel agents and customers.

Shares of American were down more than 7% in premarket trading.

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

American's profit fell 46% during the second quarter to $717 million, or $1.01 per share, even though revenues rose 2% to $14.33 billion.