1Q25 Revenue: $12.6B, flat YoY, beat estimates by $40M
1Q25 Non-GAAP EPS: –$0.59, beat estimates by $0.08
2Q25 Guidance: Expect adjusted earnings per diluted share to be between $0.50 and $1.00.
FY25 Guidance: Withdrawn full year guidance and intends to provide a full-year update as the economic outlook becomes clearer.
Comment: American Airlines delivered better than expected first quarter results with an adjusted loss of US$0.59 above the expected US$0.65 loss and revenue of US$12.55bn. The airline has withdrawn its 2025 financial forecast, citing heightened economic uncertainty stemming from escalating U.S. trade tensions and recession fears under President Trump’s shifting policies. Like several peers, American Airlines is navigating weakened consumer demand for discretionary travel. Its CEO noted that economic instability has already impacted the airline’s Q1 results and outlook for Q2. It expects Q2 EPS to be between US$0.50 and US$1.00. The airline also signalled no intention of absorbing new aerospace-related tariffs, which it views as cost-prohibitive. Looking ahead, American Airlines faces a turbulent macroeconomic environment and near-term demand will remain pressured. However, strategic flexibility and a renewed focus on high-margin routes could position American Airlines to recover stronger once economic headwinds subside. 2Q25recommended trading range: $9 to $11. Neutral Outlook.
1Q25 Revenue: $6.43B, +1.6% YoY, beat estimates by $30M
1Q25 Non-GAAP EPS: –$0.13, beat estimates by $0.06
2Q25 Guidance: Expect unit revenue to decline as much as 4% from a year ago.
FY25 Guidance: Unable to reaffirm its previous forecast of $1.7B in earnings before interest and taxes in 2025 and $3.8B in 2026.
Comment: Despite delivering first quarter revenue above estimates, Southwest Airlines has joined a growing list of U.S. carriers pulling its 2025 and 2026 financial forecasts due to rising economic uncertainty linked to President Trump’s ongoing trade war. The airline cited a sharp decline in domestic leisure travel demand, its core market, as the main challenge. With bookings softening throughout Q1 and unit revenue expected to drop up to 4% in Q2, the carrier is proactively cutting capacity and shifting its business model to adapt, introducing basic economy, bag fees, and assigned seating later this year. Its CEO described the current situation as a “recession” for the airline industry, noting that consumer hesitation is dampening travel spending faster than expected. Despite reporting a smaller-than-expected Q1 loss of US$0.13 per share and revenue of US$6.43bn, Southwest faces intensified pressure due to its limited exposure to international or corporate travel markets, making it especially vulnerable to domestic economic swings. As macroeconomic headwinds persist, Southwest Airlines is bracing for a volatile near-term environment with plans to diversify its product offerings for better revenue stabilisation. 2Q25recommended trading range: $24 to $29. Neutral Outlook.
1Q25 Revenue: $17.92B, -1.8% YoY, beat estimates by $190M
1Q25 Non-GAAP EPS: $1.48, miss estimates by $0.01
FY25 Guidance: Expect core earnings per share to decline 3%, compared with its previous expectation of a low-single-digit increase.
Comment: PepsiCo reported its first quarterly profit miss in at least five years, with core earnings expected to decline 3% in FY25. Despite price hikes, organic volume dropped 2%, indicating consumer pushback amid inflation concerns. The company lowered its annual profit forecast, citing higher supply chain costs and weaker consumer spending driven by uncertainty surrounding U.S. President Donald Trump’s expansive tariffs. PepsiCo plans to mitigate rising costs by adjusting sourcing strategies and will accelerate its shift toward natural ingredients and healthier product lines. While near-term profitability remains under pressure due to policy-related volatility and trade uncertainties, PepsiCo’s strategic focus on supply chain optimization and portfolio innovation positions it well for long-term resilience and sustainable growth. 2Q25recommended trading range: $125 to $145. Negative Outlook.
1Q25 Revenue: $12.7B, flat YoY, beat estimates by $390M
1Q25 Non-GAAP EPS: $0.13, beat estimates by $0.13
2Q25 Guidance: Expect revenue to be between $11.2B and $12.4B, short of the $12.9B average analyst estimate and adjusted profit to break even, compared with estimates of profit of 6 cents per share.
FY25 Guidance: Expects operating costs to be reduced to about $17B in FY25 and $16B in FY26, with plans to lay off more than 20% of staff. Reduced its gross capital expenditures target to $18B for 2025, down from the company’s previous target of $20B. Pushing back a $28B factory project in Ohio until 2030.
Comment: Intel reported a better-than-expected first quarter, with revenue of US$12.67bn and EPS of US$0.13. However, its Q2 revenue guidance of US$11.2bn to US12.4bn fell short of expectations of US$12.9bn, reflecting macroeconomic headwinds and demand pulled forward due to tariff-related stockpiling. Its new CEO has initiated sweeping changes, including a significant workforce reduction of potentially over 20%, cost-cutting initiatives, and a cultural shift emphasizing in-person collaboration and reduced bureaucracy. Intel also plans to reduce operating expenses to US$17bn in 2025 and US$16bn by 2026. Despite progress in its foundry business and solid PC chip sales, the company continues to lag in the booming AI market and faces uncertainty from U.S. China trade tensions. Intel faces near-term challenges from trade volatility, macroeconomic uncertainty, and intense competition in AI, its strategic overhaul under its CEO may better position the company to restore operational efficiency and drive innovation in the long-term. 2Q25recommended trading range: $19 to $24. Neutral Outlook.
1Q25 Revenue: $90.23B, +12.0% YoY, beat estimates by $1.08B
1Q25 GAAP EPS: $2.81, beat estimates by $0.80
FY25 Guidance: Expect to invest approximately $75B in capital expenditures
Dividend distribution: Declared $0.21/share quarterly dividend, 5% increase from prior dividend of $0.20, payable 16 June; for shareholders of record 9 June.
Share buyback: Board authorised a share repurchase of an additional $70B in shares
Comment: Alphabet delivered a strong first-quarter surpassing Wall Street expectations on both revenue and earnings. Total revenue reached US$90.23bn, up 12% YoY and ahead of the projected US$89.12bn. Earnings per share was US$2.81, beating the expected US$2.01. Alphabet’s core advertising business, which accounts for roughly 75% of its total revenue, grew 8.5% to US$66.89bn, driven by continued strength in Search and AI-powered features like AI Overviews, now used by 1.5 billion users monthly. YouTube ad revenue came in slightly below estimates at US$8.93 bn, while Google Cloud reported US$12.26bn in revenue, nearly doubling from 9.4% to 17.8% YoY. Alphabet continues to aggressively invest in future growth areas, with US$17.2bn in capital expenditures this quarter as part of a planned US$75bn in spending for 2025, primarily aimed at building data center capacity and advancing AI capabilities. The company also announced a US$70bn stock buyback, reinforcing confidence in its long-term prospects. Alphabet also made its largest-ever acquisition, a US$32bn cash deal for cloud security firm Wiz, which is expected to enhance its cloud offerings and encourage multi-cloud adoption among clients. Meanwhile, Waymo is scaling rapidly, delivering over 250,000 autonomous rides weekly across major U.S. cities. Looking ahead, Alphabet is well-positioned to maintain its leadership across digital advertising, AI, and cloud computing. Despite macroeconomic uncertainties, including shifting trade policies and potential APAC ad slowdowns, the company’s focus on AI infrastructure, product innovation, and scaling of new technologies will remain its key growth drivers. We believe that Alphabet is poised to capitalize on long-term trends and sustain its competitive advantage in an increasingly AI-driven tech landscape. 2Q25recommended trading range: $155 to $175. Positive Outlook.
