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A United Airlines plane flies past the Empire State Building and One Vanderbilt in New York City as it comes in for landing at Newark Liberty International Airport in Newark, New Jersey, December 3, 2021.
Gary Hirschhorn | Corbis News | Getty Images
United Airlines On Wednesday, it reported record quarterly earnings and forecast a strong third quarter due to an unrelenting travel boom, led by the resurgence of international travel.
The airline lost some capacity during the second quarter due to flight disruptions at its hub in Newark, NJ. But its quarterly results and forecasts still beat analysts’ estimates due to strong demand.
Shares were up about 3% in extended trading after the report.
United is the second US airline to report last quarter results, echoing that Delta Airlines“The forecast for travel demand is optimistic. American Airlines Earnings reports before the market opens on Thursday.
United and other carriers have expanded their international services to take advantage of strong bookings after years of pandemic recession. The airline’s revenue for international flights accounted for about 40% of its total sales but is growing faster than domestic sales.
This is what United reported For the second quarter compared to what Wall Street expected, based on average estimates compiled by Refinitiv:
- Adjusted earnings per share: $5.03 vs $4.03 expected
- Total revenue: $14.18 billion versus an expected $13.91 billion
United reported net income of $1.08 billion, or $3.24 per share, compared to $329 million, or $1 per share, during the same period last year. Adjusting items, including a trial bonus as part of a new initial business deal, earned the company $1.67 billion, or $5.03 per share.
A 26% drop in fuel bill helped boost United’s bottom line.
Meanwhile, revenue per available seat mile fell 0.4% from a year earlier. Capacity was up 17.5% from the second quarter of 2022, a percentage point lower than United had planned before the Newark unrest.
United CEO Scott Kirby said earlier this month that the company will have to reduce flights at Newark Liberty International Airport. A series of thunderstorms in the early summer derailed United’s operation at the airport, disrupting thousands of flights and displacing passengers and crews.
“United have persevered through an unprecedented series of events at the end of last month,” Kirby said in an earnings statement on Wednesday. “They are the best in the business, and we are focused on the important changes we can make, especially in Newark, to better serve our customers.”
Kirby said earlier this month that the airline would have to reduce flights at the hub, which serves the New York City area, to avoid disruptions when flights are backed up at the busy airport.
However, United expects to increase production capacity in the three months ended September 30 of approximately 16% year-over-year and estimated revenue growth of 13% during the same period in 2022. United expects to post adjusted earnings per share of $3.85. and $4.35 for the third quarter, well above analyst estimates of $3.70 per share, according to Refinitiv.
Separately over the weekend, United and its pilots union said they had reached an initial labor agreement that would give pilots raises of up to 40% over four years, a deal that follows years of talks.
The union estimates the value of the deal at $10 billion. It still has to be approved by United’s 16,000 pilots but could end years of negotiations as United seeks to increase pilot ranks amid a pilot shortage.
Airline executives will hold a call with analysts at 10:30 a.m. ET Thursday, where they will likely run into questions on both topics.
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