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United Airlines (UAL) Q3 earnings rise 33%, beat Street view; lifts FY19 EPS outlook

Earnings and revenues of United Airlines (NASDAQ: UAL) increased in the third quarter, when the aviation firm carried a higher number of passengers. The bottom-line exceeded expectations, while revenues missed. The company also revised up its full-year earnings guiandance and the stock gained about 2% on Tuesday evening immediately after the announcement.

United Airlines (UAL) Q3 earnings rise 33%, beat Street view

Reflecting the continued growth in passenger traffic, total revenues rose to $11.38 billion in the third quarter from $11 billion in the comparable period of last year. Total passenger revenue was up 3.6%. The top-line, however, missed the consensus estimate.

Unit Revenue Rises

Revenue per available seat mile rose 1.7%, while cost per available seat mile dropped 0.9%. Revenue passenger miles moved up 1.9% to 64.63 billion and available seat miles rose 2% to 75.08 billion. Consolidated passenger load factor was up by 0.1 point.

Earnings Beat

Adjusted earnings advanced 33% annually to $4.07 per share, exceeding analysts’ forecast. Reported profit was $1 billion or $3.99 per share, up from last year’s $833 million or $3.05 per share. Pre-tax earnings and pre-tax margin were $1.3 billion and 11.9% respectively.

“While headwinds affected the sector as a whole this quarter, United’s team once again demonstrated a robust ability to overcome adverse cost pressure, managing to continue growing our network while investing in winning our customers’ loyalty through smart enhancements to the United experience,” said chief executive officer Oscar Munoz.

Lifts FY19 Outlook

Buoyed by the upbeat results, the company raised its full-year 2019 adjusted earnings guidance to the range of $11.25 per share to $12.25 per share from the previous forecast of $10.5- $12.0 per share. The management said it expects to meet or exceed the adjusted earnings per share target of $11-$13 for 2020. During the quarter, United Airlines repurchased $363 million shares at an average purchase price of $88.22 per share.

United Airline shares have gained around 6% since the beginning of the year. After withdrawing from the peak, the stock witnessed significant volatility in recent months. It closed Tuesday’s regular session higher and gained further during the extended trading session.

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