American Airlines, Southwest Airlines Q2 Earnings Previews: Will They Address The Microsoft Outage Fallout?
Portfolio Pulse from Chris Katje
American Airlines and Southwest Airlines are set to report their Q2 earnings on Thursday, with a focus on the impact of the recent Microsoft outage. The outage, caused by an update from CrowdStrike, disrupted airline operations significantly. Analysts have mixed expectations for both airlines, with American Airlines expected to report lower earnings compared to last year, while Southwest is anticipated to show slight revenue growth. The airline sector has faced challenges, but domestic air travel has been strong. Recent analyst ratings and stock performance indicate struggles for both airlines.
July 24, 2024 | 8:25 pm
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NEUTRAL IMPACT
The US Global Jets ETF, which tracks the airline sector, is down 1.3% year-to-date. The upcoming earnings reports from American Airlines and Southwest Airlines, along with the impact of the Microsoft outage, will be key factors to watch.
The US Global Jets ETF has shown relative stability compared to individual airline stocks. The upcoming earnings reports and the impact of the Microsoft outage will be important factors influencing the ETF's short-term performance.
CONFIDENCE 70
IMPORTANCE 70
RELEVANCE 60
NEUTRAL IMPACT
Southwest Airlines is expected to report Q2 revenue of $7.32 billion and earnings per share of $0.51. The company may have avoided the worst of the Microsoft outage due to outdated software, potentially mitigating negative impacts.
Southwest Airlines may have avoided the worst impacts of the Microsoft outage due to its outdated software. While earnings are expected to be lower than last year, the potential mitigation of outage impacts could result in a neutral short-term effect on the stock.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
American Airlines is expected to report Q2 revenue of $14.36 billion and earnings per share of $1.05, both lower than last year. The Microsoft outage significantly impacted its operations, grounding flights and causing disruptions.
The Microsoft outage had a significant negative impact on American Airlines, grounding flights and causing operational disruptions. This, combined with lower expected earnings and revenue, suggests a likely negative short-term impact on the stock.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
NEGATIVE IMPACT
CrowdStrike's update caused a major outage in Microsoft's cloud services, leading to significant disruptions in various sectors, including airlines. This incident will likely be scrutinized in upcoming earnings reports.
CrowdStrike's update led to a significant outage in Microsoft's cloud services, causing widespread disruptions. This negative event is likely to impact CrowdStrike's short-term stock performance as the incident is scrutinized.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 70
NEGATIVE IMPACT
Microsoft's cloud services outage, caused by an update from CrowdStrike, significantly disrupted various sectors, including airlines. The fallout from this outage will be a key focus in upcoming earnings reports.
The outage in Microsoft's cloud services caused significant disruptions across various sectors, including airlines. This negative event is likely to impact Microsoft's short-term stock performance as the fallout continues to be assessed.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 80