Categories LATEST

Earnings preview: Can United Airlines overcome the 737 Max crisis?

Amidst the Boeing 737 Max crisis, United Airlines (NASDAQ: UAL) is all set to report its second-quarter financial results on Tuesday, July 16, after the regular trading hours. The company was relatively less affected by the 737 groundings as it has fewer of these aircraft in its fleet.

United has only 14 737 Max aircraft, compared to 24 in American’s (NASDAQ: AAL) fleet and 34 in Southwest’s (NYSE: LUV). Still, there may be some impact from the groundings, but the street expects improved traffic and higher domestic travel demand to offset most of it.

united airlines stock
Photo by Emiel Molenaar on Unsplash

Analysts have projected Q2 earnings of $4.05 per share, compared to just $3.23 per share in the same period last year. This outlook also takes into account a stabilized jet fuel price, which has been wreaking havoc with airline performance for most of last year. 

In the past one month, the EPS estimate has been raised twice from $4.01, suggesting increased optimism on the stock. It may be noted that United Airlines has surpassed earnings estimates in three of the past four quarters.  

READ: Everything you need to know about JetBlue stock

Revenue is expected to grow over 5% to $11.34 billion, helped by 2-2.5% projected increase in PRASM (Passenger Revenue per Available Seat Mile). Foreign currency weakness may, meanwhile, squeeze margins during the quarter.

Look out for any management updates on how it plans to deal with the 737 groundings going forward if passengers refuse to fly in it even after the faults are fixed.

United Continental - United Airlines (UAL) Q1 2019 earnings infograph
United Continental (UAL) Q1 2019 Earnings Infograph

Competitor Delta Air Lines (NYSE: DAL) last week reported better-than-expected revenue and earnings for the second quarter, allowing its shares to climb 2.2%. Both American and Southwest Airlines would report quarterly results on July 25.

Get access to timely and accurate verbatim transcripts that are published within hours of the event.

Most Popular

AVGO Earnings: All you need to know about Broadcom Q1 2021 earnings results

Broadcom Limited (NASDAQ: AVGO) reported first quarter 2021 earnings results today. Total revenue increased 14% year-over-year to $6.65 billion. GAAP net income was $1.3 billion, or $3.05 per share, compared

Infographic: Costco (COST) Q2 2021 sales up 15%; earnings miss

Retail giant Costco Wholesale Corporation (NASDAQ: COST) reported higher earnings and revenues for the second quarter of 2021. Earnings missed analysts’ expectations, while sales beat. Net profit was $951 million

Will shifting to as-a-service model help Hewlett Packard in emerging stronger from COVID?

With the corporate world rapidly shifting to cloud-native computing after the virus outbreak changed work culture and the way businesses operate, technology providers are aggressively innovating their offerings. Hewlett Packard

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top