Global airline American Airlines (NASDAQ: AAL) reported Q3 2026 results exceeding the market’s revenue expectations, with sales up 19.3% year on year to $16.34 billion. Guidance for next quarter’s revenue was better than expected at $16.94 billion at the midpoint, 1.3% above analysts’ estimates. Its non-GAAP loss of $0.28 per share was 22.6% above analysts’ consensus estimates.

Is now the time to buy American Airlines? Find out by accessing our full research report, it’s free.

“American delivered record third-quarter revenue and the strongest year-over-year revenue growth in my career, with premium performance leading the way,” said American's CEO Robert Isom. "The investments we are making across the four pillars of our commercial strategy are working, and we expect another quarter of record revenue growth to close out the year. While historically high fuel prices significantly impacted our financial results, our focus remains on restoring profitability and building a stronger American for the long term. I’m grateful to the American Airlines team for making this progress possible.”

Company overview

One of the ‘Big Four’ airlines in the US, American Airlines (NASDAQ: AAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.

Revenue growth

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, American Airlines grew its sales at a 20% annual rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the consumer discretionary sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new property or trend. American Airlines’s recent performance shows its demand has slowed as its annualized revenue growth of 6.7% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

American Airlines also discloses its number of revenue passenger miles, which reached 67.27 billion in the latest quarter. Over the last two years, American Airlines’s revenue passenger miles averaged 8.3% year-on-year growth. Because this number is higher than its revenue growth during the same period, we can see the company’s monetization has fallen.

This quarter, American Airlines reported year-on-year revenue growth of 19.3%, and its $16.34 billion of revenue exceeded Wall Street’s estimates by 0.6%. Company management is currently guiding for a 21% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 10.6% over the next 12 months. Although this projection implies its newer products and services will fuel better top-line performance, it is still below the sector average.

ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all.

Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE.

Operating margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

American Airlines’s operating margin has been trending down over the last 12 months and averaged 2.7% over the last two years. The company’s profitability was mediocre for a consumer discretionary business and shows it couldn’t pass its higher operating expenses onto its customers.

This quarter, American Airlines’s breakeven margin was 0.7%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings per share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Although American Airlines’s full-year earnings are still negative, it reduced its losses and improved its EPS by 49.1% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability.

In Q3, American Airlines reported adjusted EPS of negative $0.28, down from negative $0.17 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast American Airlines’s full-year EPS will flip from negative $0.37 to positive $0.12.

Key takeaways from American Airlines’s Q3 results

It was good to see American Airlines beat analysts’ EPS expectations this quarter. We were also glad its revenue guidance for next quarter slightly exceeded Wall Street’s estimates. On the other hand, its full-year EPS guidance missed and its EPS guidance for next quarter fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 4.6% to $11.76 immediately after reporting.

American Airlines didn’t show its best hand this quarter, but does that create an opportunity to buy the stock right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).