United Airlines Holdings Inc. reported third-quarter earnings late Tuesday that were better than Wall Street expected, but the airline’s stock fell as the company called for lower profits later in the year.
United
UAL,
earned $1.1 billion, or $3.42 a share, in the quarter, compared with $942 million, or $2.86 a share, in the same quarter a year earlier. Adjusted for one-time items, the airline earned $3.65 a share.
Sales rose to $14.5 billion from $12.9 billion a year ago.
Analysts polled by FactSet expected United to report adjusted earnings of $3.38 a share on sales of $14.4 billion.
United said it expects fourth-quarter earnings of about $1.80 a share if flights to Tel Aviv are suspended through October, and of around $1.50 a share if the Tel Aviv flights are suspended through the end of the year. The Israel-Hamas war has raged for a little over a week.
Wall Street forecast fourth-quarter earnings of $2.09 a share. United’s stock dropped more than 4% in the extended session Tuesday after ending the regular trading day up 1.5%.
The airline also called for pricier jet fuel for the fourth quarter, seeing a gallon going for $3.28 on average by that time. That compares with a third-quarter fuel average price of $2.95 a gallon.
Fourth-quarter operating revenues are seen 10% higher year-on-year, and 9% higher if the Tel Aviv flights are still halted through the end of 2023. The FactSet analysts are calling for fourth-quarter revenue of $13.6 billion, from $12.4 billion in the fourth quarter of 2022.
United earlier this month said it placed orders for an additional 110 new jets from Boeing Co.
BA,
and Airbus SE
AIR,
as it expected air-travel demand to continue unabated.
The airline in 2021 launched its United Next plan, promising more savings by using newer, more fuel-efficient jets. These newer planes often offer premium seating, allowing the airline to sell more profitable, rarely discounted first-class and business seats.
United’s stock has gained 7% so far this year, compared with an advance of about 14% for the S&P 500 index
SPX.
United is slated to hold a conference call to discuss the third-quarter results and the update through the end of the year on Wednesday at 10:30 a.m. Eastern.
