A United Airlines airplane flies in front of the Empire State Constructing and One Vanderbilt in Latest York City because it is available in for a landing at Newark Liberty International Airport in Newark, Latest Jersey, Dec. 3, 2021.
Gary Hershorn | Corbis News | Getty Images
United Airlines on Wednesday posted record quarterly earnings and forecast a robust third quarter on account of an unrelenting travel boom, led by a return of international travel.
The airline lost a few of its capability throughout the second quarter due to flight disruptions at its Newark, Latest Jersey, hub. But its quarterly results and forecast still surpassed analysts’ estimates on account of strong demand.
Shares rose roughly 3% in prolonged trading following the report.
United is the second U.S. carrier to report results for the recent quarter, echoing Delta Air Lines‘ upbeat travel demand outlook. American Airlines reports earnings before the market opens Thursday.
United and other carriers have been expanding their international service to capitalize on strong bookings after a years-long pandemic slump. The airline’s revenue for international flights made up about 40% of its total sales but is growing faster than domestic sales.
Here’s what United reported for the second quarter compared with what Wall Street expected, based on average estimates compiled by Refinitiv:
- Adjusted earnings per share: $5.03 vs. an expected $4.03
- Total revenue: $14.18 billion vs. an expected $13.91 billion
United reported net income of $1.08 billion or $3.24 per share, compared with $329 million, or $1 per share, throughout the same period last 12 months. Adjusting for items, including a pilot bonus as a part of a recent preliminary labor deal, the corporate earned $1.67 billion, or $5.03 per share.
A 26% lower fuel bill helped boost United’s bottom line.
Meanwhile, revenue per available seat mile dropped 0.4% from a 12 months earlier. Capability was up 17.5% from the second quarter of 2022, a percentage point below what United planned to fly, before the Newark disruptions.
United’s CEO Scott Kirby earlier this month said the corporate could have to cut back flights at Newark Liberty International Airport. A series of early-summer thunderstorms derailed United’s operation on the airport, disrupting 1000’s of flights and displacing passengers and crews.
“The United team persevered through an unprecedented series of events at the top of last month,” Kirby said in an earnings release Wednesday. “They’re one of the best within the business, and we’re focused on the essential changes we are able to make, especially in Newark, to serve our customers even higher.”
Kirby said earlier this month that the airline could have to reduce on flying on the hub, which serves the Latest York City area, to avoid disruptions when flights get backed up on the congested airport.
Still, United expects to grow capability within the three months ending Sept. 30 about 16% over last 12 months and with estimated revenue growth of as much as 13% throughout the same period in 2022. United expects to post adjusted earnings per share of between $3.85 and $4.35 for the third quarter, far above analysts’ estimates of $3.70 a share, in accordance with Refinitiv.
Individually over the weekend, United and its pilots’ union said they reached a preliminary labor deal that might give pilots raises of as much as 40% over 4 years, a deal that comes after years of talks.
The union estimates the deal is value $10 billion. It still must be ratified by United’s 16,000 pilots but could end years of negotiations as United seeks to extend its pilot ranks amid a shortage of aviators.
The airline’s executives will hold a call with analysts at 10:30 a.m. ET on Thursday, after they are more likely to face questions on each topics.