American Airlines shares tumble on more cautious 4Q outlook

American Airlines said Thursday that its fourth-quarter revenue and full-year 2018 profit will be lighter than previously expected, raising investors’ fears that airlines are discounting too many seats because of cheaper fuel.

American’s stock tumbled 11 percent before partially recovering to close down $1.38, or 4.1 percent, at $32.04.

American said that revenue for each seat flown one mile, a measure of pricing power, rose about 1.5 percent over the previous fourth quarter. That’s about 1 percentage point less than American had been forecasting.

Added to recent comments by Delta, American’s report raised concern among investors that airlines are losing their incentive to boost revenue because they are saving money from lower fuel prices over the past three months.

American cut its estimate of 2018 earnings per share to between $4.40 and $4.60, down from its earlier forecast of $4.50 to $5 per share. The mean prediction from 20 analysts surveyed by FactSet was $4.60 per share.

Other airline stocks fell for a time, but they too recovered during the session. United’s parent dropped nearly 3 percent, and Southwest slipped less than a percentage point, but Alaska Airlines’ parent and Delta gained ground.