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 Airlines (UAL) Down Despite Q3 Earnings & Revenue Beat
Read MoreHide Full Article
United Airlines (UAL - Free Report) reported third-quarter 2023 earnings per share (excluding 23 cents from non-recurring items) of $3.65, which outpaced the Zacks Consensus Estimate of $3.40 and improved 29.9% year over year.
Operating revenues of $14,484 million beat the Zacks Consensus Estimate of $14,441.8 million. The top line increased 12.5% year over year due to upbeat air-travel demand. This was driven by a 14.6% rise in passenger revenues (accounting for 92.5% of the top line) to $13,349 million. More than 44 million passengers traveled on UAL flights in the third quarter.
Cargo revenues fell 33.1% year over year to $333 million. Revenues from other sources jumped 10.5% from the third quarter of 2022 to $802 million.
Despite the earnings and revenue beat, UAL shares decreased in after-market trading on Oct 17 due to weak adjusted earnings per share forecast for fourth-quarter 2023. The tepid projection was due to high costs. The suspension of flights to Tel Aviv is likely to raise non-fuel costs further in the fourth quarter.
The Chicago-based carrier expects fourth-quarter adjusted earnings per share in the band of $1.50-$1.80 per share. The Zacks Consensus Estimate for fourth-quarter earnings per share is currently pegged at $2.26.
Other Details of Q3
Below, we present all comparisons (in % terms) with the third quarter of 2022 figures unless otherwise stated.
Consolidated passenger revenue per available seat mile (a key measure of unit revenues) inched down 1%. Total revenue per available seat mile dipped 2.8% to 18.49 cents. The average yield per revenue passenger mile remained flat at 19.72 cents.
Consolidated airline traffic, measured in revenue passenger miles, grew 14.6%. Capacity, measured in available seat miles, expanded 15.7%. Consolidated load factor (percentage of seat occupancy) contracted 0.9 percentage points to 86.4%. Our third-quarter estimate for load factor was 90.3%.
Average aircraft fuel price per gallon fell 22.6% to $2.95, lower than our expectation of $3.01. Fuel gallons consumed were up 14.9%.
Operating expenses (on a reported basis) increased 11.6% to $12,745 million. Consolidated unit cost or cost per available seat mile (CASM), excluding fuel, third-party business expenses, profit-sharing and special charges, increased 2.6% to 11.51 cents.
UAL exited the third quarter with cash and cash equivalents of $7,478 million compared with $7,166 million at the end of 2022. Long-term debt was $25,932 million compared with $28,283 million at the end of 2022.
Outlook
Management has highlighted two scenarios while giving fourth-quarter 2023 outlook.
Scenario 1 – Flights to Tel Aviv will remain suspended for October only.
For the fourth quarter of 2023, United Airlines envisions capacity to improve by almost 15.5% from the year-ago reported figure. CASM, excluding fuel, third-party business expenses, profit-sharing and special charges, is suggested to increase roughly 3.5% mainly due to high labor costs.
Total revenues are anticipated to climb 10.5% year over year. UAL projects fourth-quarter EPS to be $1.80. It forecasts average aircraft fuel price per gallon to be $3.28.
Scenario 2 – Flights to Tel Aviv will remain suspended through year end.
United Airlines expects capacity to improve by almost 14% from the year-ago reported figure. Total revenues are anticipated to grow 9% year over year. Adjusted CASM, excluding fuel, third-party business expenses, profit-sharing and special charges, is projected to register year-over-year growth of 5% in this scenario..
Notably, UAL has significant exposure to Israel. It envisions fourth-quarter EPS to be $1.50 in this scenario. It forecasts the average aircraft fuel price per gallon to be $3.28, even in this scenario.
Delta Air Lines (DAL - Free Report) reported third-quarter 2023 earnings (excluding 31 cents from non-recurring items) of $2.03 per share, which comfortably beat the Zacks Consensus Estimate of $1.92 and improved 35% on a year-over-year basis.
Revenues of $15,488 million beat the Zacks Consensus Estimate of $15,290.4 million and increased 11% on a year-over-year basis, driven by higher air travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $14,553 million, up 13% year over year.
J.B. Hunt Transport Services' (JBHT - Free Report) third-quarter 2023 earnings per share of $1.80 missed the Zacks Consensus Estimate of $1.85 and declined 30% year over year.
JBHT’s total operating revenues of $3,163 million also lagged the Zacks Consensus Estimate of $3,224 million and fell 17.6% year over year. Results were hurt by falling freight rates. There was a a 38% drop in volumes in JBHT's freight brokerage integrated capacity solutions segment and a 20% drop in stops in its final miles services business.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
United Airlines (UAL) Down Despite Q3 Earnings & Revenue Beat
United Airlines (UAL - Free Report) reported third-quarter 2023 earnings per share (excluding 23 cents from non-recurring items) of $3.65, which outpaced the Zacks Consensus Estimate of $3.40 and improved 29.9% year over year.
Operating revenues of $14,484 million beat the Zacks Consensus Estimate of $14,441.8 million. The top line increased 12.5% year over year due to upbeat air-travel demand. This was driven by a 14.6% rise in passenger revenues (accounting for 92.5% of the top line) to $13,349 million. More than 44 million passengers traveled on UAL flights in the third quarter.
Cargo revenues fell 33.1% year over year to $333 million. Revenues from other sources jumped 10.5% from the third quarter of 2022 to $802 million.
Despite the earnings and revenue beat, UAL shares decreased in after-market trading on Oct 17 due to weak adjusted earnings per share forecast for fourth-quarter 2023. The tepid projection was due to high costs. The suspension of flights to Tel Aviv is likely to raise non-fuel costs further in the fourth quarter.
The Chicago-based carrier expects fourth-quarter adjusted earnings per share in the band of $1.50-$1.80 per share. The Zacks Consensus Estimate for fourth-quarter earnings per share is currently pegged at $2.26.
Other Details of Q3
Below, we present all comparisons (in % terms) with the third quarter of 2022 figures unless otherwise stated.
Consolidated passenger revenue per available seat mile (a key measure of unit revenues) inched down 1%. Total revenue per available seat mile dipped 2.8% to 18.49 cents. The average yield per revenue passenger mile remained flat at 19.72 cents.
Consolidated airline traffic, measured in revenue passenger miles, grew 14.6%. Capacity, measured in available seat miles, expanded 15.7%. Consolidated load factor (percentage of seat occupancy) contracted 0.9 percentage points to 86.4%. Our third-quarter estimate for load factor was 90.3%.
Average aircraft fuel price per gallon fell 22.6% to $2.95, lower than our expectation of $3.01. Fuel gallons consumed were up 14.9%.
Operating expenses (on a reported basis) increased 11.6% to $12,745 million. Consolidated unit cost or cost per available seat mile (CASM), excluding fuel, third-party business expenses, profit-sharing and special charges, increased 2.6% to 11.51 cents.
UAL exited the third quarter with cash and cash equivalents of $7,478 million compared with $7,166 million at the end of 2022. Long-term debt was $25,932 million compared with $28,283 million at the end of 2022.
Outlook
Management has highlighted two scenarios while giving fourth-quarter 2023 outlook.
Scenario 1 – Flights to Tel Aviv will remain suspended for October only.
For the fourth quarter of 2023, United Airlines envisions capacity to improve by almost 15.5% from the year-ago reported figure. CASM, excluding fuel, third-party business expenses, profit-sharing and special charges, is suggested to increase roughly 3.5% mainly due to high labor costs.
Total revenues are anticipated to climb 10.5% year over year. UAL projects fourth-quarter EPS to be $1.80. It forecasts average aircraft fuel price per gallon to be $3.28.
Scenario 2 – Flights to Tel Aviv will remain suspended through year end.
United Airlines expects capacity to improve by almost 14% from the year-ago reported figure. Total revenues are anticipated to grow 9% year over year. Adjusted CASM, excluding fuel, third-party business expenses, profit-sharing and special charges, is projected to register year-over-year growth of 5% in this scenario..
Notably, UAL has significant exposure to Israel. It envisions fourth-quarter EPS to be $1.50 in this scenario. It forecasts the average aircraft fuel price per gallon to be $3.28, even in this scenario.
Currently, United Airlines carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported third-quarter 2023 earnings (excluding 31 cents from non-recurring items) of $2.03 per share, which comfortably beat the Zacks Consensus Estimate of $1.92 and improved 35% on a year-over-year basis.
Revenues of $15,488 million beat the Zacks Consensus Estimate of $15,290.4 million and increased 11% on a year-over-year basis, driven by higher air travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $14,553 million, up 13% year over year.
J.B. Hunt Transport Services' (JBHT - Free Report) third-quarter 2023 earnings per share of $1.80 missed the Zacks Consensus Estimate of $1.85 and declined 30% year over year.
JBHT’s total operating revenues of $3,163 million also lagged the Zacks Consensus Estimate of $3,224 million and fell 17.6% year over year. Results were hurt by falling freight rates. There was a a 38% drop in volumes in JBHT's freight brokerage integrated capacity solutions segment and a 20% drop in stops in its final miles services business.