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What's in Store for United Airlines (UAL) in Q4 Earnings?
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United Airlines (UAL - Free Report) is scheduled to report fourth-quarter 2020 earnings numbers on Jan 20, after market close.
Amid coronavirus-led weak air-travel demand, the company incurred significant losses in each of the three reported quarters of 2020. Let’s see how things are shaping up for this earnings season.
Factors to Note
Depressed travel demand is likely to get reflected on passenger revenues, which account for the bulk of the top line. The Zacks Consensus Estimate for passenger revenues in the fourth quarter indicates a 72.8% decline from the year-ago reported figure. The airline anticipates total revenues to slump nearly 70% year over year in the period. The Zacks Consensus Estimate calls for a 67% year-over-year drop in revenues in the soon-to-be-reported quarter.
To match the tepid demand scenario, United Airlines slashed its capacity significantly from the 2019 levels. For the fourth quarter, the airline anticipates capacity to decline least 55% year over year. The Zacks Consensus Estimate for the same hints at a 55.4% fall from the year-ago reported number.
Due to massive capacity cuts, the carrier’s non-fuel unit costs are surging. The Zacks Consensus Estimate suggests a 47.5% year-over-year rise in non-fuel unit cost or cost per available seat mile (CASM) excluding fuel, third-party business expenses, profit-sharing and special charges in the fourth quarter. The company’s bottom line is expected to reflect this anticipated increase in non-fuel unit costs.
However, with fuel costs comprising a major chunk of airline expenditures, reduced expenses on fuel, thanks to modest fuel prices, are likely to have partly offset the revenue decline. The Zacks Consensus Estimate indicates a 35.6% decrease in average fuel price per gallon for the fourth quarter.
Amid coronavirus-led passenger revenue weakness, United Airlines’ cargo revenues are surging. Similar to the third quarter, the cargo unit is expected to have put up a strong show in the fourth quarter as well. Notably, the Zacks Consensus Estimate for cargo revenues implies a 38.9% jump from the fourth-quarter 2019’s reported figure.
The proven Zacks model does not conclusively predict an earnings beat for United Airlines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: United Airlines has an Earnings ESP of -3.42% as the Most Accurate Estimate is pegged at a loss of $6.58 while the Zacks Consensus Estimate is pinned at a loss of $6.37. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: United Airlines carries a Zacks Rank #3.
Highlights of Q3 Earnings
In the last-reported quarter, the company delivered a negative earnings surprise of 6.9% with wider-than-expected loss. Quarterly revenues also lagged the Zacks Consensus Estimate and plummeted 78.1% year over year with 84.3% drop in passenger revenues. Results were hurt by coronavirus-induced weakness in air-travel demand.
Stocks to Consider
Investors interested in the broader Transportation sector may consider Alaska Air Group (ALK - Free Report) , Canadian Pacific Railway Limited (CP - Free Report) and C.H. Robinson Worldwide (CHRW - Free Report) , as these stocks possess the right combination of elements to beat on earnings this reporting cycle.
Alaska Air has an Earnings ESP of +2.33% and a Zacks Rank #3. The company will release fourth-quarter 2020 financial numbers on Jan 26.
Canadian Pacific has an Earnings ESP of +0.12% and a Zacks Rank #3. The company will announce fourth-quarter 2020 results on Jan 27.
C.H. Robinson has an Earnings ESP of +1.01% and a Zacks Rank #3. The company is scheduled to release fourth-quarter 2020 results on Jan 26.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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What's in Store for United Airlines (UAL) in Q4 Earnings?
United Airlines (UAL - Free Report) is scheduled to report fourth-quarter 2020 earnings numbers on Jan 20, after market close.
Amid coronavirus-led weak air-travel demand, the company incurred significant losses in each of the three reported quarters of 2020. Let’s see how things are shaping up for this earnings season.
Factors to Note
Depressed travel demand is likely to get reflected on passenger revenues, which account for the bulk of the top line. The Zacks Consensus Estimate for passenger revenues in the fourth quarter indicates a 72.8% decline from the year-ago reported figure. The airline anticipates total revenues to slump nearly 70% year over year in the period. The Zacks Consensus Estimate calls for a 67% year-over-year drop in revenues in the soon-to-be-reported quarter.
To match the tepid demand scenario, United Airlines slashed its capacity significantly from the 2019 levels. For the fourth quarter, the airline anticipates capacity to decline least 55% year over year. The Zacks Consensus Estimate for the same hints at a 55.4% fall from the year-ago reported number.
Due to massive capacity cuts, the carrier’s non-fuel unit costs are surging. The Zacks Consensus Estimate suggests a 47.5% year-over-year rise in non-fuel unit cost or cost per available seat mile (CASM) excluding fuel, third-party business expenses, profit-sharing and special charges in the fourth quarter. The company’s bottom line is expected to reflect this anticipated increase in non-fuel unit costs.
However, with fuel costs comprising a major chunk of airline expenditures, reduced expenses on fuel, thanks to modest fuel prices, are likely to have partly offset the revenue decline. The Zacks Consensus Estimate indicates a 35.6% decrease in average fuel price per gallon for the fourth quarter.
Amid coronavirus-led passenger revenue weakness, United Airlines’ cargo revenues are surging. Similar to the third quarter, the cargo unit is expected to have put up a strong show in the fourth quarter as well. Notably, the Zacks Consensus Estimate for cargo revenues implies a 38.9% jump from the fourth-quarter 2019’s reported figure.
United Airlines Holdings Inc Price
United Airlines Holdings Inc price | United Airlines Holdings Inc Quote
What Does the Zacks Model Say?
The proven Zacks model does not conclusively predict an earnings beat for United Airlines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: United Airlines has an Earnings ESP of -3.42% as the Most Accurate Estimate is pegged at a loss of $6.58 while the Zacks Consensus Estimate is pinned at a loss of $6.37. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: United Airlines carries a Zacks Rank #3.
Highlights of Q3 Earnings
In the last-reported quarter, the company delivered a negative earnings surprise of 6.9% with wider-than-expected loss. Quarterly revenues also lagged the Zacks Consensus Estimate and plummeted 78.1% year over year with 84.3% drop in passenger revenues. Results were hurt by coronavirus-induced weakness in air-travel demand.
Stocks to Consider
Investors interested in the broader Transportation sector may consider Alaska Air Group (ALK - Free Report) , Canadian Pacific Railway Limited (CP - Free Report) and C.H. Robinson Worldwide (CHRW - Free Report) , as these stocks possess the right combination of elements to beat on earnings this reporting cycle.
Alaska Air has an Earnings ESP of +2.33% and a Zacks Rank #3. The company will release fourth-quarter 2020 financial numbers on Jan 26.
Canadian Pacific has an Earnings ESP of +0.12% and a Zacks Rank #3. The company will announce fourth-quarter 2020 results on Jan 27.
C.H. Robinson has an Earnings ESP of +1.01% and a Zacks Rank #3. The company is scheduled to release fourth-quarter 2020 results on Jan 26.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>