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United Airlines (UAL) Gains Despite Q1 Earnings & Revenue Miss
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United Airlines (UAL - Free Report) incurred a loss of $4.24 per share in the first quarter of 2022, wider than the Zacks Consensus Estimate of a loss of $4.19. This is the ninth consecutive quarterly loss incurred by the company as coronavirus concerns continue to weigh on air-travel demand. Results were hurt by Omicron-induced softness in travel demand in the first half of the reported quarter. Operating revenues of $7,566 million also fell short of the Zacks Consensus Estimate of $7,657.2 million.
Despite this below-par first-quarter performance, shares of United Airlines gained 7.6% in after-market trading on Apr 20 as the company’s bullish guidance for the second quarter lifted investors’ spirits.
UAL expects to return to profitability in the second quarter with an operating margin (both on reported and adjusted basis) of 10%. TRASM is estimated to climb about 17% in the ongoing quarter from the comparable period in 2019. The company is seeing steady recovery in business travel demand and expects improvement in international demand.
United Airlines Holdings Inc Price, Consensus and EPS Surprise
Coming back to United Airlines’ first-quarter results, the bottom line improved 43.5% year over year. Meanwhile, the top line surged more than 100% year over year as air-travel demand continued to rebound from the pandemic-led slump. However, with the prevalent pandemic, the same declined 21.1% from the first quarter of 2019.
The year-over-year increase in the top line was driven by more than 100% rise in passenger revenues (accounted for 83.9% of the top line) to $6,348 million. Despite this significant year-over-year improvement, passenger revenues fell 27.2% from the first quarter of 2019. Cargo revenues skyrocketed more than 100% year over year to $627 million. Revenues from other sources inched up 2.2% from the first quarter of 2019 to $591 million.
Operating Results
Below, we present all comparisons (in % terms) with first-quarter 2019.
Consolidated passenger revenue per available seat mile (PRASM: a key measure of unit revenues) decreased 10.3% to 11.92 cents. Total revenue per available seat mile (TRASM) dipped 2.8% to 14.2 cents. On a consolidated basis, average yield per revenue passenger mile was flat at 16.43 cents.
Consolidated airline traffic, measured in revenue passenger miles, dropped 27.2%, while capacity, measured in available seat miles, fell 18.9%. Consolidated load factor (percentage of seat occupancy) deteriorated 8.3 percentage points to 72.6% as traffic declined more than the drop in capacity. Average aircraft fuel price per gallon jumped 40.5% to $2.88. Fuel gallons consumed were down 21.3%.
Adjusted operating expenses decreased 4.3% to $6,686 million. Consolidated unit cost or cost per available seat mile (CASM), excluding fuel, third-party business expenses, profit-sharing and special charges, ascended by 17.8%.
United Airlines, carrying a Zacks Rank #3 (Hold), exited the first quarter with cash and cash equivalents of $18,468 million compared with $18,283 million at the end of 2021. Long-term debt at the end of the reported quarter was $29,665 million compared with $30,361 million at the end of December 2021. The company exited the quarter with total available liquidity of $20 billion.
Outlook
For the second quarter, United Airlines expects capacity to decline around 13% from the second quarter of 2019. CASM, excluding fuel, third-party business expenses, profit-sharing and special charges, is anticipated to increase 16% in the current quarter from the 2019 level. UAL forecasts the average aircraft fuel price per gallon to be $3.43 in the second quarter. Adjusted capital expenditures are predicted to be $5.3 billion for full-year 2022.
Sectorial Snapshot
Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) and J.B. Hunt Transport Services (JBHT - Free Report) recently reported first-quarter 2022 results.
Delta, carrying a Zacks Rank #2 (Buy), incurred a loss (excluding 25 cents from non-recurring items) of $1.23 per share in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of $1.28. With Omicron hampering travel plans in the early part of first-quarter 2022, the carrier incurred a loss after reaping profits in the last two quarters of 2021. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Delta’s first-quarter revenues came in at $9,348 million, which not only beat the Zacks Consensus Estimate of $9,063.5 million but also soared in excess of 100% from the year-ago figure. The uptick in air-travel demand in the United States can be gauged from the fact that 80.5% of first-quarter 2022 passenger revenues came from domestic markets.
J.B. Hunt, carrying a Zacks Rank #3, reported first-quarter 2022 earnings of $2.29 per share, which surpassed the Zacks Consensus Estimate of $1.91. The bottom line surged 67.2% year over year on higher revenues across all segments.
J.B. Hunt’s first-quarter operating revenues of $3,488.6 million also outperformed the Zacks Consensus Estimate of $3,260.5 million. The top line jumped 33.3% year over year. Total operating revenues, excluding fuel surcharges, rose 27.4% year over year.
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United Airlines (UAL) Gains Despite Q1 Earnings & Revenue Miss
United Airlines (UAL - Free Report) incurred a loss of $4.24 per share in the first quarter of 2022, wider than the Zacks Consensus Estimate of a loss of $4.19. This is the ninth consecutive quarterly loss incurred by the company as coronavirus concerns continue to weigh on air-travel demand. Results were hurt by Omicron-induced softness in travel demand in the first half of the reported quarter. Operating revenues of $7,566 million also fell short of the Zacks Consensus Estimate of $7,657.2 million.
Despite this below-par first-quarter performance, shares of United Airlines gained 7.6% in after-market trading on Apr 20 as the company’s bullish guidance for the second quarter lifted investors’ spirits.
UAL expects to return to profitability in the second quarter with an operating margin (both on reported and adjusted basis) of 10%. TRASM is estimated to climb about 17% in the ongoing quarter from the comparable period in 2019. The company is seeing steady recovery in business travel demand and expects improvement in international demand.
United Airlines Holdings Inc Price, Consensus and EPS Surprise
United Airlines Holdings Inc price-consensus-eps-surprise-chart | United Airlines Holdings Inc Quote
Coming back to United Airlines’ first-quarter results, the bottom line improved 43.5% year over year. Meanwhile, the top line surged more than 100% year over year as air-travel demand continued to rebound from the pandemic-led slump. However, with the prevalent pandemic, the same declined 21.1% from the first quarter of 2019.
The year-over-year increase in the top line was driven by more than 100% rise in passenger revenues (accounted for 83.9% of the top line) to $6,348 million. Despite this significant year-over-year improvement, passenger revenues fell 27.2% from the first quarter of 2019. Cargo revenues skyrocketed more than 100% year over year to $627 million. Revenues from other sources inched up 2.2% from the first quarter of 2019 to $591 million.
Operating Results
Below, we present all comparisons (in % terms) with first-quarter 2019.
Consolidated passenger revenue per available seat mile (PRASM: a key measure of unit revenues) decreased 10.3% to 11.92 cents. Total revenue per available seat mile (TRASM) dipped 2.8% to 14.2 cents. On a consolidated basis, average yield per revenue passenger mile was flat at 16.43 cents.
Consolidated airline traffic, measured in revenue passenger miles, dropped 27.2%, while capacity, measured in available seat miles, fell 18.9%. Consolidated load factor (percentage of seat occupancy) deteriorated 8.3 percentage points to 72.6% as traffic declined more than the drop in capacity. Average aircraft fuel price per gallon jumped 40.5% to $2.88. Fuel gallons consumed were down 21.3%.
Adjusted operating expenses decreased 4.3% to $6,686 million. Consolidated unit cost or cost per available seat mile (CASM), excluding fuel, third-party business expenses, profit-sharing and special charges, ascended by 17.8%.
United Airlines, carrying a Zacks Rank #3 (Hold), exited the first quarter with cash and cash equivalents of $18,468 million compared with $18,283 million at the end of 2021. Long-term debt at the end of the reported quarter was $29,665 million compared with $30,361 million at the end of December 2021. The company exited the quarter with total available liquidity of $20 billion.
Outlook
For the second quarter, United Airlines expects capacity to decline around 13% from the second quarter of 2019. CASM, excluding fuel, third-party business expenses, profit-sharing and special charges, is anticipated to increase 16% in the current quarter from the 2019 level. UAL forecasts the average aircraft fuel price per gallon to be $3.43 in the second quarter. Adjusted capital expenditures are predicted to be $5.3 billion for full-year 2022.
Sectorial Snapshot
Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) and J.B. Hunt Transport Services (JBHT - Free Report) recently reported first-quarter 2022 results.
Delta, carrying a Zacks Rank #2 (Buy), incurred a loss (excluding 25 cents from non-recurring items) of $1.23 per share in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of $1.28. With Omicron hampering travel plans in the early part of first-quarter 2022, the carrier incurred a loss after reaping profits in the last two quarters of 2021. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Delta’s first-quarter revenues came in at $9,348 million, which not only beat the Zacks Consensus Estimate of $9,063.5 million but also soared in excess of 100% from the year-ago figure. The uptick in air-travel demand in the United States can be gauged from the fact that 80.5% of first-quarter 2022 passenger revenues came from domestic markets.
J.B. Hunt, carrying a Zacks Rank #3, reported first-quarter 2022 earnings of $2.29 per share, which surpassed the Zacks Consensus Estimate of $1.91. The bottom line surged 67.2% year over year on higher revenues across all segments.
J.B. Hunt’s first-quarter operating revenues of $3,488.6 million also outperformed the Zacks Consensus Estimate of $3,260.5 million. The top line jumped 33.3% year over year. Total operating revenues, excluding fuel surcharges, rose 27.4% year over year.