United reports Q3 earnings beat, upbeat Q4 profit and margin guidance
United Airlines (UAL) reported a third quarter earnings beat after the bell on Wednesday, a week after rival Delta (DAL) saw premium and business travelers boost its results.
Chicago-based United posted operating revenue of $15.2 billion versus $15.28 billion, per Bloomberg consensus, a slight miss but up 3% compared to a year ago. United posted adjusted earnings per share (EPS) of $2.78 versus $2.66 estimated, with available seat miles coming in at 87.42 billion versus the 86.51 billion expected. The highly watched metric of passenger revenue per available seat mile (PRASM) came in at $73.77 billion versus $72.71 billion estimated.
Looking ahead, United said it anticipates Q4 adjusted EPS in the $3.00 to $3.50 range, topping the $2.82 estimated. The airline said it sees margins expanding a point or more each year.
United stock fell over 3% in early trading on Thursday, though reversed higher during the earnings call on commentary concerning growing the airline’s margins.
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“We’ve invested in customers at every price point: Seatback screens, an industry-leading mobile app, extra legroom, a lie-flat United Polaris seat, and fast, free, reliable Starlink on every plane by 2027. Our customers value the United experience, making them increasingly loyal to United,” CEO Scott Kirby said in a statement.
“Those investments over almost a decade, combined with great service from our people, have allowed United to win and retain brand-loyal customers, leading to economic resilience even with macro economic volatility through the first three quarters of the year and significant upside as the economy and demand are improving in the fourth quarter,” he added.
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United said premium cabin revenue rose 6% year over year in Q3, with revenue from Basic Economy rising 4% year over year and loyalty revenue up 9% year over year.
Last quarter, premium cabin and cargo revenue boosted United’s revenue to a record $15.2 billion, with the company guiding its full-year EPS range to $9.00 to $11.00. United said it would address full-year targets on its earnings call slated for tomorrow.
Last week, Delta said a “significant improvement” in its revenue outlook led the airline to tighten its outlook to the upper bounds of its projection, with its premium business up 9% and corporate sales up 8%.
Despite the good second quarter, United was plagued by operational issues earlier this year at one of its largest hubs, Newark Liberty Airport in New Jersey.
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