A United Airlines Boeing 737 Max 9 aircraft lands at San Francisco International Airport on March 13, 2019.
Justin Sullivan | Getty Images
United Airlines on Monday forecast a first-quarter loss because of the Federal Aviation Administration’s grounding of Boeing 737 Max 9 planes this month after a component blew out during an Alaska Airlines flight operated with that variety of aircraft.
United expects to post an adjusted lack of between 35 cents and 85 cents a share for the primary three months of the 12 months, it said in a filing. The forecast is the primary indication for investors of the financial damage attributable to the FAA’s grounding of the planes, issued a day after the incident on Alaska Airlines Flight 1282 on Jan. 5.
United has 79 of the aircraft in its fleet, greater than every other carrier, followed by Alaska. United said Monday it expects the planes to stay grounded through Jan. 26, though its forecast assumes it won’t give you the chance to fly the planes in any respect this month.
Each airlines have canceled a whole bunch of flights this month while the planes remain grounded for inspection. The more common Boeing 737 Max 8, which is in fleets at United, American and Southwest, is not affected by the grounding order.
United said it expects unit costs, excluding fuel, to be up mid-single-digit percentage points in the primary quarter from last 12 months, three points of that impact coming from the Max grounding. It forecast flat unit revenues for the primary three months of the 12 months.
The primary-quarter warning from United comes after a comparatively strong holiday period, though airlines have faced several winter storms in the primary few weeks of January.
United shares were up greater than 6% in after-hours trading.
For the last three months of 2023, United posted net income of $600 million, down nearly 29% from a 12 months ago. Revenue got here in at $13.63 billion, which was up almost 10% from a 12 months earlier and ahead of analysts’ estimates. Adjusting for one-time items, United’s fourth-quarter earnings of $2 a share fell from $2.46 a 12 months earlier.
Here’s what United reported within the fourth quarter in comparison with what Wall Street expected, based on average estimates compiled by LSEG, formerly generally known as Refinitiv:
- Adjusted earnings per share:Â $2.00 vs. an expected $1.69
- Total revenue:Â $13.63 billion vs. an expected $13.54 billion
United hit its full-year adjusted earnings goal of between $10 and $12 a share, posting $10.05 for the full-year 2023.
“Despite unpredictable headwinds, we delivered on our ambitious EPS goal that few thought possible — and set latest operational records for our customers,” said United Airlines CEO Scott Kirby in an earnings release.
The airline touted strong travel demand late last 12 months and solid bookings to this point this 12 months. For the full-year 2024, United forecast adjusted earnings of between $9 and $11 a share, inside analysts’ estimates.
United executives are holding an earnings call at 10:30 a.m. ET on Tuesday once they are prone to face questions on compensation from Boeing for the grounding. Alaska reports before the market opens on Thursday, and Boeing is scheduled to report results Jan. 31.
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