We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
United Continental Gains on Improved Q4 Unit Revenue View
Read MoreHide Full Article
Shares of United Continental Holdings (UAL - Free Report) have been on an uptrend in recent times. The stock has comfortably outpaced the Zacks categorized Transportation-Airline industry in the last three months. The stock gained 37.63% compared with the industry, which advanced just 19.12% over the same period.
Continuing its trend of bullish performance, United Continentalunveiled an improved guidance with respect to passenger unit revenues for the final quarter of 2016. The bullish guidance naturally found favor with investors, resulting in the stock gaining significantly in after-market trading on Jan 10.
Owing to better-than-expected close-in bookings and yields, the company now expects passenger unit revenues (a measure of sales relative to capacity for a carrier) for the fourth quarter of 2016 to decline in the band of 1.25–1.75%, on a year-over-year basis. The view represents a marked improvement from the earlier guidance, when the metric was expected to decline in the band of 3–4%. The carrier said that in the two weeks leading to Christmas, business demand exceeded expectations and holiday season demand for leisure touched the roof.
We note that United Continental is not the only company to have come out with a bullish unit revenue guidance. Its peers like Delta Air Lines (DAL - Free Report) , American Airlines Group (AAL - Free Report) and Southwest Airlines (LUV - Free Report) have all unfurled improved views with respect to this key metric for the fourth quarter of 2016.
Apart from the bullish fourth-quarter unit revenue view, United Continental raised its guidance for pre-tax margin (adjusted). United Continental now expects the metric in the range of 9.25% to 9.75% (previous guidance with respect to the metric was in the band of 7.5% to 8.5%). Due to the recent labor deals inked by the company, costs will increase in the final quarter of 2016.
Consequently, the carrier expects consolidated unit cost per available seat mile (CASM) – excluding fuel, profit sharing and third-party expenses – to increase in the band of 4% to 4.25 % in the quarter. Fuel Price (inclusive of all cash settled hedges) is projected at $1.62 per gallon. Capacity for the fourth quarter is predicted to expand by 2% in the final quarter of 2016.
Apart from the forecast, the company revealed that consolidated traffic – measured in Revenue Passenger Miles or RPMs – for the month of December climbed 2.6% year over year to 17.6 billion. RPMs grew both in the domestic and international markets. Consolidated capacity – measured in Available Seat Miles – was up 2.6% to 21.2 billion. Another important metric, load factor (percentage of seats filled with passengers) climbed marginally to 83.1% in the final month of 2016. For full-year 2016, consolidated traffic and capacity increased 0.8% and 1.4%, respectively. Load factor contracted 50 basis points to 82.9%.
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
United Continental Gains on Improved Q4 Unit Revenue View
Shares of United Continental Holdings (UAL - Free Report) have been on an uptrend in recent times. The stock has comfortably outpaced the Zacks categorized Transportation-Airline industry in the last three months. The stock gained 37.63% compared with the industry, which advanced just 19.12% over the same period.
Continuing its trend of bullish performance, United Continental unveiled an improved guidance with respect to passenger unit revenues for the final quarter of 2016. The bullish guidance naturally found favor with investors, resulting in the stock gaining significantly in after-market trading on Jan 10.
Owing to better-than-expected close-in bookings and yields, the company now expects passenger unit revenues (a measure of sales relative to capacity for a carrier) for the fourth quarter of 2016 to decline in the band of 1.25–1.75%, on a year-over-year basis. The view represents a marked improvement from the earlier guidance, when the metric was expected to decline in the band of 3–4%. The carrier said that in the two weeks leading to Christmas, business demand exceeded expectations and holiday season demand for leisure touched the roof.
We note that United Continental is not the only company to have come out with a bullish unit revenue guidance. Its peers like Delta Air Lines (DAL - Free Report) , American Airlines Group (AAL - Free Report) and Southwest Airlines (LUV - Free Report) have all unfurled improved views with respect to this key metric for the fourth quarter of 2016.
Apart from the bullish fourth-quarter unit revenue view, United Continental raised its guidance for pre-tax margin (adjusted). United Continental now expects the metric in the range of 9.25% to 9.75% (previous guidance with respect to the metric was in the band of 7.5% to 8.5%). Due to the recent labor deals inked by the company, costs will increase in the final quarter of 2016.
Consequently, the carrier expects consolidated unit cost per available seat mile (CASM) – excluding fuel, profit sharing and third-party expenses – to increase in the band of 4% to 4.25 % in the quarter. Fuel Price (inclusive of all cash settled hedges) is projected at $1.62 per gallon. Capacity for the fourth quarter is predicted to expand by 2% in the final quarter of 2016.
Apart from the forecast, the company revealed that consolidated traffic – measured in Revenue Passenger Miles or RPMs – for the month of December climbed 2.6% year over year to 17.6 billion. RPMs grew both in the domestic and international markets. Consolidated capacity – measured in Available Seat Miles – was up 2.6% to 21.2 billion. Another important metric, load factor (percentage of seats filled with passengers) climbed marginally to 83.1% in the final month of 2016. For full-year 2016, consolidated traffic and capacity increased 0.8% and 1.4%, respectively. Load factor contracted 50 basis points to 82.9%.
Zacks Rank
United Continental Holdings currently carries a Zacks Rank # 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>