United Airlines (UAL) to report Q3 earnings on Oct 15. Here’s what to expect

United Airlines Holdings, Inc. (NYSE: UAL) is all set to publish its third-quarter report next week. The company has initiated a capacity reduction program that will extend into the fourth quarter, to align operations with the current demand trend. While it continues to benefit from the post-COVID upswing in long-haul travel, the company also faces challenges like delays in aircraft delivery and safety incidents.

This week, the aviation giant’s stock reached the highest level in the past 52 weeks, continuing its recovery from the lows seen two months ago. It has grown a whopping 30% in the past three months alone. Market watchers are bullish in their outlook, citing the stock’s potential to remain in the growth mode.

Q3 Report on Tap

It is estimated that United Airline’s profit decreased to $3.12 per share in the September quarter from $3.65 per share last year. The consensus revenue estimate is $14.78 billion, which represents a 2.4% annual increase. The company will unveil its Q3 numbers on Tuesday, October 15, at 4:00 pm ET.

Earlier, the management issued cautious third-quarter guidance as airline companies experience an oversupply that puts pressure on pricing and profitability. It expects Q3 profit to be in the range of $2.75 per share to $3.25 per share, which is below the market’s projection. The company also reaffirmed full-year earnings guidance between $9 per share and $11 per share, anticipating margins to benefit from the positive cost performance.

United Next

The recent Fed rate cut should act as a catalyst for United’s efforts to boost passenger traffic. According to the leadership, its ambitious United Next plan is progressing as planned — expanding the network by adding new aircraft to the fleet and upgrading facilities in existing units. Recently, the company signed a pact with Elon Musk’s satellite internet service Starlink to provide free inflight Wi-Fi to passengers. The ongoing capacity optimization, to maintain operations sustainably, has resulted in an improvement in revenue per available seat mile.

From United Airlines’ Q2 2024 earnings call:

“United Next was a great strategy, but a great strategy only works with great execution, and that has allowed us to structurally and permanently change our position within the industry. And while we are proud of our relative outperformance to the industry, we also know that our absolute results are all that really matter. They’re solid right now, but I can already see the impact that the schedule changes are having on our advanced bookings and yields as we hit the mid-August industry capacity inflection point.”

Mixed Q2

In the second quarter, net income per share, excluding one-off items, decreased to $4.14 per share from $5.03 per share in the corresponding period a year earlier. Earnings exceeded analysts’ estimates, marking the eighth beat in a row. On an unadjusted basis, net income was $1.32 billion or $3.96 per share in Q2, vs. $1.08 billion or $3.24 per share in the year-ago quarter.

Revenues increased to $14.99 billion in Q2 from $14.18 billion in the comparable period of 2023. The top line came in slightly below estimates, reversing the recent trend. Passenger revenue, which constitutes the lion’s share of the total, grew 5% year-over-year reflecting continued momentum in domestic travel.

United Airlines’ stock is maintaining an uptrend ahead of next week’s earnings. It opened Wednesday’s session above $60, and made steady gains in early trading.