Portugal Colonial - American Airlines shares fall on weak forecast

The carrier projected a third-quarter loss of between 10 and 60 cents per share, and offered a full-year forecast range of between a loss of 20 cents and a gain of 80 cents per share.

Both of these ranges lag analyst expectations.

The forecast came as American reported a profit of $599 million in the second quarter, down 16.4 percent from the year-ago level. Revenues rose less than one percent, but came in at $14.4 billion, a record.

Executives with the airline emphasized that it is more exposed to the US market compared with competitors Delta Air Lines and United Airlines. Those two companies also cited weakness in domestic travel, but enjoyed a greater lift from international travel.

During the quarter, domestic revenues were down about six percent, said CEO Robert Isom.

The tepid trend has continued through July, but Isom pointed to an improvement in bookings in recent weeks for travel in the coming months.

The weakness in travel was due to consumer angst earlier this year as uncertainty over President Donald Trump's tariff policies battered equity markets.

Isom described an improvement in demand as Trump has reached trade deals and after the administration's fiscal package was enacted, extending corporate tax cuts.

Major US equity indices are now at records.

"As we move from June to July, we're seeing the same uptick in bookings that everyone else is seeing," Isom said. "It's been remarkable."

Isom said the company's third-quarter results would also be buffeted by a hit from an unusual confluence of bad weather, pointing to 5,500 weather cancellations in the first three weeks of July.

Isom described the period as an "anomaly" and predicted that American would "shine" over the long term because of "how we've operated during a really difficult environment."

Shares of the airline fell 7.3 percent in morning trading.

R.J.Fidalgo--PC