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UAL incurred a loss for eight consecutive quarters as coronavirus concerns continue to weigh on air-travel demand. The Zacks Consensus Estimate for the March quarter’s bottom line is currently pegged at a loss of $4.05, much wider than a loss of $2.44 estimated 90 days ago. This unfavorable revision mainly stemmed from the upsurge in oil price, fueled by supply concerns due to the Russia-Ukraine war.
United Airlines Holdings Inc Price and EPS Surprise
Against this backdrop, let’s discuss the factors that are expected to have impacted United Airlines’ performance in the March quarter.
We expect United Airlines’ bottom-line performance in the to-be-reported quarter to have been dented by high fuel costs. The oil price is persistently moving north, having escalated 33% in first-quarter 2022, triggered by the Russia-Ukraine war. The carrier expects fuel price per gallon (adjusted) in first-quarter 2022 to be $2.99 compared with the previous expectation of $2.51. The airline recorded an adjusted fuel price of $2.41 in the fourth quarter of 2021.
Management expects the March-quarter capacity to be down approximately 19% from the first-quarter 2019 actuals. The same is compared with the prior projection of a 16-18% decline. The guidance worsened due to the omicron-led woes earlier this year and more flight cancellations due to the ongoing geopolitical tensions.
As a result of lower capacity, UAL now expects first-quarter 2022 non-fuel unit costs to increase roughly 18% from the first-quarter 2019 finals. The same is compared with the previous guidance of an increase between 14% and 15%.
However, despite high fuel costs, passenger revenues are likely to have been strong owing to upbeat air-travel demand. Per management, air-travel demand was better than expected after the peak period of omicron cases. As a result of a strong demand scenario, bookings (systemwide) for travel have improved nearly 40 points since the first week of 2022. In another positive update, management confirmed that business traffic has increased in excess of 30 points since the peak of the Omicron impact in January.
UAL now expects first-quarter 2022 total operating revenues to be near the better end of the previous projection of a decline in the 20-25% range from the first-quarter 2019 reading.
What Does the Zacks Model Unveil?
The proven Zacks model does not predict a bottom-line outperformance 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 surprise, which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: United Airlines has an Earnings ESP of -6.79% as the Most Accurate Estimate is pegged at a loss of $4.32, while the Zacks Consensus Estimate is pinned at a loss of $4.05. 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, currently.
Highlights of Q4
United Airlines incurred a loss (excluding 39 cents from non-recurring items) of $1.60 per share in the fourth quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $2.23. Operating revenues of $8,192 million also outperformed the Zacks Consensus Estimate of $7,930.9 million.
Both the top and the bottom lines improved significantly year over year, thanks to strong holiday travel demand. The amount of loss incurred in the December quarter narrowed 77.1% year over year. This is the eighth consecutive quarterly loss incurred by UAL as coronavirus concerns continue to weigh on air-travel demand.
Stocks to Consider
Investors interested in the broader Transportation sector may consider Landstar System (LSTR - Free Report) and Knight-Swift Transportation Holdings (KNX - Free Report) . These companies possess the right combination of elements to beat on earnings this reporting cycle.
Landstar System has an Earnings ESP of +9.22% and is a Zacks #3 Ranked stock at present. LSTR will release first-quarter 2022 results on Apr 20.
Landstar’s first-quarter results are expected to reflect gains from an improved freight scenario in the United States. Higher truck rates owing to tight truck capacity are anticipated to have aided its March-quarter performance.
Knight-Swift has an Earnings ESP of +4.17% and is currently a #3 Ranked player. KNX will release first-quarter 2022 results on Apr 20.
Knight-Swift’s first-quarter results are expected to reflect an improved freight scenario in the United States. Revenues at the Logistics segment are likely to have been strong on increased load count and revenue per load.
Image: Bigstock
What's in the Offing for United Airlines' (UAL) Q1 Earnings?
United Airlines (UAL - Free Report) is scheduled to report first-quarter 2022 earnings numbers on Apr 20, after market close.
UAL incurred a loss for eight consecutive quarters as coronavirus concerns continue to weigh on air-travel demand. The Zacks Consensus Estimate for the March quarter’s bottom line is currently pegged at a loss of $4.05, much wider than a loss of $2.44 estimated 90 days ago. This unfavorable revision mainly stemmed from the upsurge in oil price, fueled by supply concerns due to the Russia-Ukraine war.
United Airlines Holdings Inc Price and EPS Surprise
United Airlines Holdings Inc price-eps-surprise | United Airlines Holdings Inc Quote
Against this backdrop, let’s discuss the factors that are expected to have impacted United Airlines’ performance in the March quarter.
We expect United Airlines’ bottom-line performance in the to-be-reported quarter to have been dented by high fuel costs. The oil price is persistently moving north, having escalated 33% in first-quarter 2022, triggered by the Russia-Ukraine war. The carrier expects fuel price per gallon (adjusted) in first-quarter 2022 to be $2.99 compared with the previous expectation of $2.51. The airline recorded an adjusted fuel price of $2.41 in the fourth quarter of 2021.
Management expects the March-quarter capacity to be down approximately 19% from the first-quarter 2019 actuals. The same is compared with the prior projection of a 16-18% decline. The guidance worsened due to the omicron-led woes earlier this year and more flight cancellations due to the ongoing geopolitical tensions.
As a result of lower capacity, UAL now expects first-quarter 2022 non-fuel unit costs to increase roughly 18% from the first-quarter 2019 finals. The same is compared with the previous guidance of an increase between 14% and 15%.
However, despite high fuel costs, passenger revenues are likely to have been strong owing to upbeat air-travel demand. Per management, air-travel demand was better than expected after the peak period of omicron cases. As a result of a strong demand scenario, bookings (systemwide) for travel have improved nearly 40 points since the first week of 2022. In another positive update, management confirmed that business traffic has increased in excess of 30 points since the peak of the Omicron impact in January.
UAL now expects first-quarter 2022 total operating revenues to be near the better end of the previous projection of a decline in the 20-25% range from the first-quarter 2019 reading.
What Does the Zacks Model Unveil?
The proven Zacks model does not predict a bottom-line outperformance 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 surprise, which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: United Airlines has an Earnings ESP of -6.79% as the Most Accurate Estimate is pegged at a loss of $4.32, while the Zacks Consensus Estimate is pinned at a loss of $4.05. 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, currently.
Highlights of Q4
United Airlines incurred a loss (excluding 39 cents from non-recurring items) of $1.60 per share in the fourth quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $2.23. Operating revenues of $8,192 million also outperformed the Zacks Consensus Estimate of $7,930.9 million.
Both the top and the bottom lines improved significantly year over year, thanks to strong holiday travel demand. The amount of loss incurred in the December quarter narrowed 77.1% year over year. This is the eighth consecutive quarterly loss incurred by UAL as coronavirus concerns continue to weigh on air-travel demand.
Stocks to Consider
Investors interested in the broader Transportation sector may consider Landstar System (LSTR - Free Report) and Knight-Swift Transportation Holdings (KNX - Free Report) . These companies possess the right combination of elements to beat on earnings this reporting cycle.
Landstar System has an Earnings ESP of +9.22% and is a Zacks #3 Ranked stock at present. LSTR will release first-quarter 2022 results on Apr 20.
Landstar’s first-quarter results are expected to reflect gains from an improved freight scenario in the United States. Higher truck rates owing to tight truck capacity are anticipated to have aided its March-quarter performance.
Knight-Swift has an Earnings ESP of +4.17% and is currently a #3 Ranked player. KNX will release first-quarter 2022 results on Apr 20.
Knight-Swift’s first-quarter results are expected to reflect an improved freight scenario in the United States. Revenues at the Logistics segment are likely to have been strong on increased load count and revenue per load.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.