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UAL has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 16.49%.
United Airlines Holdings Inc Price and EPS Surprise
The Zacks Consensus Estimate for fourth-quarter 2023 earnings has been revised 31.2% downward over the last 90 days.
Given this backdrop, let’s examine the factors likely to have influenced United Airlines’ performance in the to-be-reported quarter.
We expect high fuel costs to have dented UAL’s bottom-line performance in the December quarter. With oil prices moving north, fuel cost per gallon is likely to have been high. For fourth-quarter 2023, United Airlines anticipates the average fuel cost per gallon to be $3.28 per gallon, much higher than the third-quarter actual figure of $2.95. Our estimate, too, is pegged at $3.28 per gallon.
Additionally, UAL is burdened with expenses related to non-fuel unit costs. Non-fuel unit cost or cost per available seat mile (CASM: adjusted) is expected to increase approximately 5% from fourth-quarter 2022 levels. High labor costs and low capacity are leading to the uptick.
With flights to Tel Aviv remaining suspended, capacity is likely to be low in the to-be-reported quarter. Labor costs are likely to have been high due to higher wages arising from the contract with pilots that was ratified in 2023.
Buoyant air-travel demand in the holiday period is likely to have boosted the top line in the quarter under review. We expect passenger revenues to jump 11.8% from the prior year.
What Our Model Says
Our proven 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. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
UAL has an Earnings ESP of -0.47% (the Most Accurate Estimate is currently pegged at $1.60 per share, 1 cent below the Zacks Consensus Estimate) and a Zacks Rank #3.
Q3 Highlights
United Airlines 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.
Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on their fourth-quarter 2023 earnings.
AAL is scheduled to report fourth-quarter 2023 earnings on Jan 25. The Zacks Consensus Estimate for earnings has been revised 200% upward over the last 60 days. AAL has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 23.83%.
Canadia National (CNI - Free Report) has an Earnings ESP of +0.41% and a Zacks Rank #2. CNI is scheduled to report fourth-quarter 2023 earnings on Jan 23.
Canadian National has an unimpressive earnings surprise history, having surpassed the Zacks Consensus Estimate only once in the preceding four quarters (missing the mark on the other occasions), the average miss being 0.05%.
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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 2023 results on Jan 22 after market close.
UAL has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 16.49%.
United Airlines Holdings Inc Price and EPS Surprise
United Airlines Holdings Inc price-eps-surprise | United Airlines Holdings Inc Quote
The Zacks Consensus Estimate for fourth-quarter 2023 earnings has been revised 31.2% downward over the last 90 days.
Given this backdrop, let’s examine the factors likely to have influenced United Airlines’ performance in the to-be-reported quarter.
We expect high fuel costs to have dented UAL’s bottom-line performance in the December quarter. With oil prices moving north, fuel cost per gallon is likely to have been high. For fourth-quarter 2023, United Airlines anticipates the average fuel cost per gallon to be $3.28 per gallon, much higher than the third-quarter actual figure of $2.95. Our estimate, too, is pegged at $3.28 per gallon.
Additionally, UAL is burdened with expenses related to non-fuel unit costs. Non-fuel unit cost or cost per available seat mile (CASM: adjusted) is expected to increase approximately 5% from fourth-quarter 2022 levels. High labor costs and low capacity are leading to the uptick.
With flights to Tel Aviv remaining suspended, capacity is likely to be low in the to-be-reported quarter. Labor costs are likely to have been high due to higher wages arising from the contract with pilots that was ratified in 2023.
Buoyant air-travel demand in the holiday period is likely to have boosted the top line in the quarter under review. We expect passenger revenues to jump 11.8% from the prior year.
What Our Model Says
Our proven 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. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
UAL has an Earnings ESP of -0.47% (the Most Accurate Estimate is currently pegged at $1.60 per share, 1 cent below the Zacks Consensus Estimate) and a Zacks Rank #3.
Q3 Highlights
United Airlines 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.
Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on their fourth-quarter 2023 earnings.
American Airlines (AAL - Free Report) has an Earnings ESP of +43.10% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
AAL is scheduled to report fourth-quarter 2023 earnings on Jan 25. The Zacks Consensus Estimate for earnings has been revised 200% upward over the last 60 days. AAL has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 23.83%.
Canadia National (CNI - Free Report) has an Earnings ESP of +0.41% and a Zacks Rank #2. CNI is scheduled to report fourth-quarter 2023 earnings on Jan 23.
Canadian National has an unimpressive earnings surprise history, having surpassed the Zacks Consensus Estimate only once in the preceding four quarters (missing the mark on the other occasions), the average miss being 0.05%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.