Categories Analysis, Industrials

What to expect when United Airlines (UAL) reports Q2 2024 earnings results

United has guided for adjusted EPS of $3.75-4.25 in Q2 2024

Shares of United Airlines (NASDAQ: UAL) turned red in midday trade on Wednesday. The stock has gained 11% over the past three months. The airline is scheduled to report its second quarter 2024 earnings results on Wednesday, July 17, after markets close. Here’s a look at what to expect from the earnings report:

Revenue

Analysts are projecting revenue of $15.1 billion for United in the second quarter of 2024, which would represent an increase of over 6% year-over-year. In the first quarter of 2024, operating revenue increased nearly 10% YoY to $12.5 billion.

Earnings

United has guided for adjusted EPS of $3.75-4.25 in Q2 2024. The consensus estimate is $3.99, which compares to adjusted EPS of $5.03 reported in the same period a year ago. In Q1 2024, the company reported an adjusted loss of $0.15 per share.

Points to note

United’s second quarter results are expected to benefit from strong demand for air travel, particularly strong summer travel as well as continued improvement in business travel. In Q1, United’s passenger revenue grew 10% YoY while unit revenue was up 0.6%. Passenger revenue per available seat mile (PRASM) was up 1%. Managed corporate travel was up 14%.

Last quarter, the company saw a rise in domestic PRASM while international PRASM saw a decline. Latin American PRASM was down nearly 13%. The Atlantic region saw growth in PRASM while the Pacific region saw a drop.

On its last quarterly call, United said that for the second quarter, it was seeing strong domestic and Atlantic demand with positive PRASM results, tempered by the Pacific where it expects a negative result YoY. The company also expects Latin America to have a materially negative PRASM result YoY in Q2.

The challenges caused by the Boeing fleet weighed on United’s profitability last quarter. The uncertainty created by the Boeing MAX grounding and the delays to United’s aircraft deliveries have been pressuring expenses, and the continued reduction in capacity from delivery delays are expected to temporarily pressure costs through the year. The impact of this could likely be seen in the second quarter as well.

At the same time, United’s efforts in improving the travel experience for customers by providing assistance through AI tools and such capabilities as well as its plans to expand its routes are likely to prove beneficial.

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