United Airlines (UAL) earnings 3Q 22

A United Airlines Boeing 737 Max 9 aircraft landed at San Francisco International Airport in Burlingame, California on March 13, 2019.

Justin Sullivan | Getty Pictures

United Airlines He forecast another profit for the end of the year and said that the consumer’s appetite for travel shows no signs of slowing down despite high airfares.

Shares rose more than 7% in after-hours trading on Tuesday.

“Looking forward to the end of the year, the airline expects strong Covid recovery trends to continue to overcome recessionary pressures in the macroeconomic environment,” United said in an earnings statement. Said. “The airline now expects its fourth quarter adjusted operating margin to be above 2019 for the first time.”

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

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

The airline said it expects adjusted earnings of up to $2.25 per share for the fourth quarter, well ahead of analysts’ 98-cent estimates, according to Refinitiv.

The strong summer travel season and sunny outlook for the remainder of the year suggest that consumers are willing to continue spending on travel since the start of the pandemic, when Covid-19 restrictions devastated demand. Delta Airlines last week it delivered record revenue for the third quarter and forecast another profit for the fourth quarter.

Airline executives’ optimistic views contrast with other industries struggling this year, including parts of the retail industry and some streaming platforms that took advantage of the lockdown early in the pandemic.

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

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

As CNBC reported last month, US airline executives noted that there is strong demand for Europe after it has passed the summer peak and into the fall, and in response they are holding more capacity in those markets.

Airlines remain constrained in the number of flights they can offer, as aircraft deliveries are delayed due to supply chain issues and other issues, and carriers struggle to recruit and train new personnel, especially pilots.

The limited supply of flights drives prices up. United said its third-quarter revenue per current seat mile increased more than 25% from three years ago. For the current quarter, it expects this metric to increase by this amount compared to 2019.

Meanwhile, the carrier said its fourth-quarter capacity will likely decrease by around 10% compared to 2019, similar to its third-quarter capacity.

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

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