UAL Provides Weak Q2 Outlook

UAL Corp. (UAUA - Analyst Report) sees a second-quarter decline in consolidated passenger unit revenue (PRASM) of between 17.9% and 18.9% on a year-over-year basis.

However, shares of the company are up about 8% this afternoon.

In a regulatory filing, it was revealed that UAL expects second-quarter consolidated available seat miles to decrease 9% from last year's levels. Consolidated traffic is projected to fall in the range of 9.5% to 10.5%.

UAL expects to be in compliance with the fixed charge loan covenant at the end of the second quarter.

It expects to end the quarter with a cash balance of $2.5 billion, which includes $.3 billion of restricted cash, compared to $2.7 billion (including $255 million of restricted cash) at the end of the first quarter.

For the second quarter, the consensus' loss estimate is currently $1.16 per share, which is wider by 24 cents over the past month and by 18 cents in the past 7 days.

The full-year average forecast for a loss of $4.70 has widened by 68 cents over the past 30 days and 62 cents in just the past week.

So far, about 8.75 million shares have changed hands, compared with the daily average volume of 7.8 million.

UAL is a Zacks #3 Rank ("Hold") stock.