UAL Corp. Misses Zacks Estimate
UAL Corporation (UAUA - Analyst Report) posted a first quarter loss of $4.00 per share before nonrecurring items, up from a $4.38 loss per share in the year-ago quarter, and compares to a consensus loss of $4.45 per share and our estimate of a loss of $2.41 per share.
The shortfall from our estimate largely reflects a worse-than-expected decline in revenues, which fell 22% year over year to $3.7 billion on a 15.1% decline in mainline revenue passenger miles and a 10.4% decline in yield. In addition, cargo revenues dropped 43% year over year due to weak demand in Asia.
UAUA was able to offset much of this by a $1.1 billion fall in operating expenses, about two-thirds of which related to fuel. The non-fuel operating expense portion matched the decline in capacity.
Positively, UAUA added over $400 million in cash in several financing transactions, and ended the quarter with a total cash balance of $2.7 billion.
For 2009, we are cutting our diluted estimate to a loss of $1.50 per share from earnings of $0.75 per share due to the first quarter shortfall and a reduction in our revenue estimates as they have been disproportionately hurt by the decline in premium and business demand. We expect results to benefit from capacity cuts and lower fuel costs. However, we are increasingly concerned about the impact of competitive pricing pressures on the bottom line.
Our initial estimate for 2010 is $1.75.
We have a Hold recommendation on UAUA and note that the current Zacks rank is 3, indicating no clear directional pressure on the share price over the near term. UAUA shares fell almost 7% from yesterdays closing price of $6.63.
|
|
|
Share |
RSS |
Rate Pos |
Rate Neg |
Comment |
|
|
||||||
Best Stocks. Best Insight. Join Now...it's FREE!
Over 550,000 investors look forward to the timely insights in our email newsletter; Zacks Profit from the Pros. In each daily issue you will find:
- Free Four Zacks #1 Rank "Strong Buy" Stocks
- Free Timely Market Commentary
- Free Wealth Management Tips
- Free Profitable Strategy Screens
- Free Bull and Bear Stocks of the Day
Zacks FREE Registration
X Close
Loading Stories...Most Popular on Zacks.com
More Zacks Resources
Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.
Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.
Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.
My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.
More Zacks Links
| Market Summary | Nov 26, 2009 12:54 pm ET |
Sponsored Links


Sponsored Links 
3.53 %

[CLICK TO CLOSE X]