United Airlines (UAL) Q3 2023 results

A United Airlines Boeing 787-10 Dreamliner taking off from Barcelona Airport in Barcelona on March 28, 2023.

JanValls | Photo only | Getty Images

United Airlines said more expensive jet fuel and a halt to the airline’s Tel Aviv flights during the Israel-Hamas war would hurt its profits in the final three months of the year.

For the current quarter, the Chicago-based airline estimated adjusted earnings of $1.50 to $1.80 per share, below analysts’ forecasts of $2.06.

United would then earn between $9.55 and $9.85 per share on an adjusted basis, down from its original value forecast in July between $11 and $12 per share, based on fourth-quarter guidance. Fuel prices at major U.S. airports have risen nearly 25% since the start of the summer.

Its shares fell about 4% in after-hours trading.

United and other U.S. and international airlines suspended flights to Israel earlier this month. United had more flights to Israel than any U.S.-based airline with service from Washington, DC; Newark, New Jersey; and San Francisco.

United said fourth-quarter revenue will rise 9% year-over-year if flights to Israel remain suspended through the end of the year, and 10.5% if the suspension lasts only through October. Non-fuel costs are expected to rise 3.5 percent to 5 percent in the fourth quarter starting in 2022, United said.

The suspension of service comes after a robust summer for air travel, in which revenue growth to international destinations outpaced domestic ticket sales. That’s what brought in major, global airlines like United and delta on a better basis than some low-cost airlines such as Spiritwhich are more concentrated in US cities and expect losses.

Here’s something United reported for the third quarter compared to Wall Street expectations, based on average estimates from LSEG, formerly known as Refinitiv:

  • Adjusted earnings per share: $3.65 versus expected $3.35
  • Total sales: $14.48 billion versus expected $14.44 billion

United had third-quarter net income of $1.14 billion, or $3.42 per share, compared with $942 million, or $2.86 per share, a year earlier. Adjusted for one-time items, United had earnings per share of $3.65.

Sales rose from $12.88 billion to $14.48 billion.

The airline will host a call with analysts and media on Wednesday at 10:30 a.m. ET, asking questions about fourth-quarter demand and how the airline plans to contain rising costs.

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