Stock Market News

United Airlines falls short of profit estimates on higher costs

2022.07.21 00:18

United Airlines falls short of profit estimates on higher costs
FILE PHOTO: United Airlines planes are parked at their gates at O’Hare International Airport ahead of the Thanksgiving holiday in Chicago, Illinois, U.S., November 20, 2021. REUTERS/Brendan McDermid

By Rajesh Kumar Singh

CHICAGO (Reuters) – United Airlines Holdings (NASDAQ:UAL) on Wednesday posted a lower-than-expected quarterly profit, its first without government aid since the pandemic began, as booming travel demand failed to offset higher operating costs.

The Chicago-based carrier reported an adjusted profit of $1.43 per share for the quarter through June, below analysts’ expectations for $1.95, according to Refinitiv.

United reported one profitable pandemic quarter, through September 2021, with federal government aid.

American carriers are enjoying the strongest summer travel season in three years as more people resume regular activities including vacations. International traffic and corporate travel demand are also on a rebound, making for a profitable second-quarter for most of the major carriers.

However, labor shortages have forced them to cut flights, making them unable to fully tap the pent-up demand for travel. Operating expenses have risen along with fuel costs.

Rival Delta Air Lines (NYSE:DAL) last week warned that cost pressures would remain elevated through the year as it battles operational challenges.

United’s non-fuel costs rose 17% in the second quarter from the same period in 2019. It expects a similar increase in the third quarter.

Carriers are using 2019, before the pandemic, as the benchmark for their performance.

Its fuel costs surged by 45% in the June quarter from a quarter ago. However, they are projected to moderate in the current quarter.

United expects consumer demand to remain strong despite growing worries that higher air fares, persistently high inflation and rising interest rates could dent travel spending in the second half of the year.

It estimates total revenue per available seat mile to be up 24%-26% in the quarter through September from the same period in 2019, translating into an operating margin of 10%.

However, it intends to keep its capacity below the pre-pandemic level in the current and fourth quarters to avoid stretching its resources thin.

United will discuss the results on a call with analysts and investors on Thursday morning.

Source

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 76,792.57 1.05%
vested-xor
Vested XOR (VXOR) $ 3,405.08 99,999.99%
ethereum
Ethereum (ETH) $ 2,892.34 7.31%
tether
Tether (USDT) $ 1.00 0.23%
solana
Solana (SOL) $ 197.53 4.90%
bnb
BNB (BNB) $ 600.58 1.92%
usd-coin
USDC (USDC) $ 1.00 0.18%
xrp
XRP (XRP) $ 0.557235 3.16%
dogecoin
Dogecoin (DOGE) $ 0.193767 1.45%
staked-ether
Lido Staked Ether (STETH) $ 2,892.26 7.37%
cardano
Cardano (ADA) $ 0.397095 10.52%
tron
TRON (TRX) $ 0.160882 1.77%
the-open-network
Toncoin (TON) $ 4.94 4.27%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,417.93 7.20%
avalanche-2
Avalanche (AVAX) $ 27.68 4.05%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 76,570.52 1.14%
shiba-inu
Shiba Inu (SHIB) $ 0.000019 0.83%
weth
WETH (WETH) $ 2,890.39 7.19%
chainlink
Chainlink (LINK) $ 12.64 5.31%
bitcoin-cash
Bitcoin Cash (BCH) $ 384.13 2.68%
sui
Sui (SUI) $ 2.34 2.12%
polkadot
Polkadot (DOT) $ 4.16 1.35%
leo-token
LEO Token (LEO) $ 6.26 0.06%
usds
USDS (USDS) $ 1.00 0.27%
uniswap
Uniswap (UNI) $ 9.07 2.90%
litecoin
Litecoin (LTC) $ 72.18 2.95%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,038.67 7.24%
near
NEAR Protocol (NEAR) $ 4.24 1.27%
aptos
Aptos (APT) $ 9.78 4.21%
pepe
Pepe (PEPE) $ 0.000011 11.48%
bittensor
Bittensor (TAO) $ 513.24 1.48%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.42 0.10%
internet-computer
Internet Computer (ICP) $ 7.78 0.27%
dai
Dai (DAI) $ 1.00 0.09%
monero
Monero (XMR) $ 168.10 2.68%
stellar
Stellar (XLM) $ 0.101898 5.40%
ethereum-classic
Ethereum Classic (ETC) $ 20.15 4.46%
kaspa
Kaspa (KAS) $ 0.117378 1.47%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.12%
whitebit
WhiteBIT Coin (WBT) $ 19.52 0.97%
aave
Aave (AAVE) $ 185.79 9.08%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.346319 4.72%
blockstack
Stacks (STX) $ 1.69 1.26%
crypto-com-chain
Cronos (CRO) $ 0.092382 8.80%
okb
OKB (OKB) $ 40.39 3.12%
dogwifcoin
dogwifhat (WIF) $ 2.39 0.36%
first-digital-usd
First Digital USD (FDUSD) $ 1.00 0.17%
mantle
Mantle (MNT) $ 0.696342 17.34%
arbitrum
Arbitrum (ARB) $ 0.583667 8.57%
filecoin
Filecoin (FIL) $ 3.78 3.12%