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United Airlines (UAL) earnings 3Q 22


A United Airlines Boeing 777-200 aircraft

Nicolas Economou | NurPhoto | Getty Images

United Airlines forecast one other profit for the top of the 12 months and said consumer appetite for travel is showing no signs of slowing down despite high airfares.

Shares jumped greater than 7% in after-hours trading on Tuesday.

“Looking forward through the top of the 12 months, the airline expects the strong Covid recovery trends to proceed to beat the recessionary pressures within the macroeconomic environment,” United said in an earnings release. “The airline now expects fourth-quarter adjusted operating margin to be above 2019 for the primary time.”

The Chicago-based carrier posted a third-quarter profit of $942 million, down 8% from three years ago, and $12.88 billion in revenue, which was ahead of analysts’ estimates and up 13% from 2019.

Adjusting for one-time items, United earned $2.81 per share, easily topping the $2.28 analysts polled by Refinitiv were expecting.

The airline said it expects adjusted earnings per share of as much as $2.25 for the fourth quarter, far ahead of analysts’ estimates of 98 cents, in line with Refinitiv.

The strong summer travel season and sunny outlook for the remaining of the 12 months indicate consumers are willing to proceed to spend on trips, a turnaround from early within the pandemic when Covid-19 restrictions devastated demand. Delta Air Lines last week said it brought in record revenue for the third quarter and forecast one other profit for the fourth quarter.

The upbeat outlooks from airline executives contrast with other sectors which have struggled this 12 months, including parts of the retail industry and a few streaming platforms that were beneficiaries of lockdowns early within the pandemic.

Here’s how United performed within the third quarter compared with what Wall Street expected, based on average estimates compiled by Refinitiv:

  • Adjusted earnings per share: $2.81 versus an expected $2.28
  • Total revenue: $12.88 billion versus expected $12.75 billion.

U.S. airline executives have recently noted strong demand to Europe well past the summer peak and into the autumn, and are keeping more capability in those markets in response, CNBC reported last month.

Airlines remain constrained in what number of flights they’ll offer as aircraft deliveries run late due to supply chain problems and other issues, and carriers scramble to rent and train latest staff, particularly pilots.

Limited supply of flights is keeping fares up. United said its third-quarter revenue per available seat mile was up greater than 25% from three years earlier. For the present quarter, it expects that metric to be up by as much as that quantity compared with 2019.

Meanwhile, the carrier said its fourth-quarter capability will likely be down about 10% compared with 2019, much like its capability within the third quarter.

United executives will hold a call with analysts on Wednesday at 10:30 a.m. EDT.

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