Categories Analysis, Earnings, Industrials

What to expect when United Airlines (UAL) reports earnings next week

For the fourth quarter of 2022, United has guided for adjusted EPS of $2.00-2.25

Shares of United Airlines Holdings Inc. (NASDAQ: UAL) were up over 3% on Wednesday. The stock has gained 25% year-to-date and 38% over the past three months. The company is slated to report its fourth quarter 2022 earnings results on Tuesday, January 17, after market close. Here’s a look at what to expect from its upcoming earnings report:

Revenue

Analysts are predicting revenue of $12.2 billion for United Airlines for the fourth quarter of 2022. This compares to revenue of $10.8 billion reported in the fourth quarter of 2019. In the third quarter of 2022, the company generated total operating revenue of $12.9 billion, which was up 13% from the same period in 2019.

United Airlines Q3 2022 earnings infographic

The company is seeing strong demand trends as leisure travel remains strong and the hybrid work model allows further flexibility for travel. United expects a strong revenue environment in the fourth quarter of 2022. The company expects TRASM in Q4 to increase 24-25% from the 2019 period on 9-10% less capacity. This is close to the third quarter number of a 25.5% increase on about 10% less capacity compared to Q3 2019.

Profits and margins

Analysts expect United to report EPS of $2.12 in Q4 2022. This compares to adjusted EPS of $2.67 in Q4 2019. In the third quarter of 2022, the company reported adjusted EPS of $2.81, which was down 31% from the same period in 2019. For the fourth quarter of 2022, United has guided for adjusted EPS of $2.00-2.25.

Adjusted operating margin was 11.5% in the third quarter of 2022. The airline expects adjusted operating margin in Q4 2022 to be about 10%, which is higher than the 9.1% reported in Q4 2019.

Costs

In the third quarter of 2022, cost per available seat mile, excluding fuel (CASM-ex) was up 14.5% from the same period in 2019. For the fourth quarter of 2022, the company expects CASM-ex to be up 11-12% compared to Q4 2019.

Click here to read the full transcript of United Airlines’ Q3 2022 earnings conference call

Looking for more insights on the earnings results? Click here to access the full transcripts of the latest earnings conference calls!

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