United posts record earnings and forecasts strong profits for bustling summer quarter

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A United Airlines airplane flies in front of the Empire State Building and One Vanderbilt in New York City as it comes in for a landing at Newark Liberty International Airport in Newark, New Jersey, Dec. 3, 2021.
Gary Hershorn | Corbis News | Getty Images

United Airlines on Wednesday posted record quarterly earnings and forecast a strong third quarter due to an unrelenting travel boom, led by a return of international travel.

The airline lost some of its capacity during the second quarter because of flight disruptions at its Newark, New Jersey, hub. But its quarterly results and forecast still surpassed analysts’ estimates due to strong demand.

Shares rose roughly 3% in extended 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, during the same period last year. Adjusting for items, including a pilot bonus as part of a new preliminary labor deal, the company 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 year earlier. Capacity 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 company will have to reduce flights at Newark Liberty International Airport. A series of early-summer thunderstorms derailed United’s operation at the airport, disrupting thousands of flights and displacing passengers and crews.

“The United team persevered through an unprecedented series of events at the end of last month,” Kirby said in an earnings release Wednesday. “They are the best in the business, and we’re focused on the important changes we can make, especially in Newark, to serve our customers even better.”

Kirby said earlier this month that the airline will have to cut back on flying at the hub, which serves the New York City area, to avoid disruptions when flights get backed up at the congested airport.

Still, United expects to grow capacity in the three months ending Sept. 30 about 16% over last year and with estimated revenue growth of as much as 13% during 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, according to Refinitiv.

Separately over the weekend, United and its pilots’ union said they reached a preliminary labor deal that would give pilots raises of as much as 40% over four years, a deal that comes after years of talks.

The union estimates the deal is worth $10 billion. It still needs to be ratified by United’s 16,000 pilots but could end years of negotiations as United seeks to increase 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, when they are likely to face questions on both topics.

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