American Airlines Cuts Full-Year Adjusted Earnings Forecast

American Airlines ( AAL ) significantly reduced its full-year earnings projections Thursday as Chief Executive Officer (CEO ) Robert Isom acknowledged the company’s second quarter fell short of expectations.

The carrier now expects full-year adjusted earnings per share (EPS) of $0.70 to $1.30—a huge cut from the $2.25 to $3.25 range that American projected in April.

“American has a fleet, network and product built to deliver results, but during the second quarter, we did not perform to our initial expectations due to our prior sales and distribution strategy and an imbalance of domestic supply and demand,” Isom said.

CEO Says American Taking ‘Clear and Decisive Actions’ To Fix Problems

“We are taking this challenge head-on, with clear and decisive actions to deliver on a strategy that maximizes our revenue and profitability, and importantly, one that makes it easy for customers to do business with American,” Isom added.

Going forward, American said it is renegotiating contracts with corporate customers and travel agencies in a revision to its past sales strategy, which included cutting benefits and pushing customers to book directly rather than on third-party sites, according to Reuters .

American reported record quarterly revenue of $14.3 billion and EPS of $1.01 in the second quarter, roughly in line with consensus expectations of analysts polled by Visible Alpha.

Shares of American initially were lower in premarket trading after reporting results Thursday, but turned higher and were up 6.8% to $10.86 as of 12:15 p.m. ET.