United Airlines (UAL) 3Q 2024 earnings

United Airlines said Tuesday that it’s starting a $1.5 billion share buyback because the carrier reported higher-than-expected earnings for the busy summer travel season and forecast strong results for the last three months of the yr.

United expects to earn an adjusted $2.50 to $3.00 a share within the fourth quarter, in comparison with $2.00 a share a yr earlier and the $2.68 analysts polled by LSEG estimated.

Here’s what United reported for the third quarter compared with what Wall Street expected, based on average estimates compiled by LSEG:

• Earnings per share: $3.33 adjusted vs. $3.17 expected
• Revenue: $14.84 billion vs. $14.78 billion expected

The share buyback can be United’s first since before the Covid-19 pandemic. U.S. airlines received greater than $50 billion in government aid in the course of the pandemic travel slump that prohibited share repurchases and dividends, though airlines were still fighting for financial stability.

Southwest Airlines announced a $2.5 billion share repurchase program last month.

“Like other leading airlines and firms, we’re initiating a measured, strategic share repurchase program,” United CEO Scott Kirby said in a note to staff on Tuesday. “Importantly, my commitment to you is that investing in our people and our business will at all times be my top priority even while we institute this share repurchase program.”

For the third quarter, United posted revenue of $14.84 billion, up 2.5% from a yr earlier and above analysts’ estimates. It reported net income of $965 million, down 15% from a yr ago.

United said domestic unit revenue was positive in August and September in comparison with last yr as airlines trimmed a glut of flights that were pushing down fares. United expanded capability by 4.1% within the third quarter. The carrier said corporate revenue rose 13% within the quarter; premium revenue, including business class tickets, rose 5%; and sales from its no-frills basic economy tickets were up 20%.

The airline last week unveiled a far-flung expansion for next yr that included recent flights to Mongolia, Senegal, Spain and Greenland in a chase for international travel demand.

Adjusting for one-time items, United reported earnings per share of $3.33, topping Wall Street forecasts and United’s estimate in July of $2.75 to $3.25 a share.

Airline executives will hold a call with analysts at 10:30 a.m. ET on Wednesday and can likely face questions on demand for the top of the yr and into 2025, in addition to production problems at Boeing, where most factories have been idled during a greater than monthlong machinist strike.

United’s flight attendants’ union, which hasn’t yet reached a recent labor agreement with the corporate slammed the airline’s decision to resume buybacks.

In an announcement, Sara Nelson, president of the Association of Flight Attendants-CWA, which represents crews at United, Spirit, Alaska and other carriers, said: “That cash United just promised Wall Street belongs to Flight Attendants who worked throughout the pandemic and through this taxing recovery for all of us on the frontlines.”