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United Continental Holdings, Inc.

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Even though United Continental Holdings outperformed in the third quarter of 2017, shares of the carrier plummeted following the earnings release. This was because the company said that it will continue to expand capacity in a bid to maintain market share at major airport hubs to deal with competition from discount carriers. Consolidated capacity is projected to climb approximately 3.5% in the fourth quarter. In fact, shares of United Continental have underperformed its industry so far this year. This disappointing performance was due to multiple headwinds led by the Apr 9 passenger fiasco. Also, the company's bottom line has been hurt by the surge in labor and fuel costs. Third-quarter earnings declined 28.6% year over year due to higher costs. However, we are impressed with the company's expansion and fleet modernization efforts.

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