It has been about a month since the last earnings report for United Airlines (UAL Quick QuoteUAL - Free Report) . Shares have added about 24.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is United due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Earnings Beat in Q3

United Airlines reported third-quarter 2024 earnings per share (excluding 43 cents from non-recurring items) of $3.33, which surpassed the Zacks Consensus Estimate of $3.10. Earnings decreased 8.8% on a year-over-year basis.

Operating revenues of $14.84 billion beat the Zacks Consensus Estimate of $14.76 billion. The top line increased 2.5% year over year due to upbeat air-travel demand. This was driven by a 1.6% rise in passenger revenues (which accounted for 91.3% of the top line) to $13.56 billion. Almost 45,559 passengers traveled on UAL flights in the third quarter, up 2.7% year over year.

Cargo revenues grew 25.2% year over year to $417 million. Revenues from other sources jumped 7.9% from the third quarter of 2023 to $865 million.

Other Details of Q3

Below, we present all comparisons (in % terms) with the third quarter of 2023 figures unless otherwise stated.

Airline traffic, measured in revenue passenger miles, grew 2.7%. Capacity, measured in available seat miles, expanded 4.1%. As traffic failed to outpace capacity expansion, the consolidated load factor (percentage of seat occupancy) fell 1.1 percentage points to 85.3%. 

Consolidated passenger revenue per available seat mile (a key measure of unit revenues) inched down 2.4%. Total revenue per available seat mile fell 1.6% to 18.20 cents. The average yield per revenue passenger mile fell 1.1% to 19.50 cents.

Average aircraft fuel price per gallon fell 13.2% to $2.56. Fuel gallons consumed were up 3.4%.

Operating expenses (on a reported basis) increased 4.2% to $13.3 billion. Consolidated unit cost or cost per available seat mile (CASM), excluding fuel, third-party business expenses, profit-sharing and special charges, increased 6.5% to 12.26 cents.

UAL exited the third quarter with cash and cash equivalents of $8.8 billion compared with $10.8 billion at the prior-quarter end. Long-term debt was $22.2 billion compared with $21.7 billion at the second-quarter end.

UAL’s board of directors authorized a new share repurchase program worth $1.5 billion. The program has no specific expiration date and will conclude only when the company has completed all its purchases authorized under the program, if not suspended by the company’s board of directors.

Outlook

For the fourth quarter of 2024, UAL expects adjusted EPS in the range of $2.50-$3.00. 

For 2024, UAL continues to expect adjusted capital expenditures of around $6.5 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

The consensus estimate has shifted 6.81% due to these changes.

VGM Scores

At this time, United has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise United has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

United is part of the Zacks Transportation - Airline industry. Over the past month, Delta Air Lines (DAL Quick QuoteDAL - Free Report) , a stock from the same industry, has gained 14.5%. The company reported its results for the quarter ended September 2024 more than a month ago.

Delta reported revenues of $15.68 billion in the last reported quarter, representing a year-over-year change of +1.2%. EPS of $1.50 for the same period compares with $2.03 a year ago.

Delta is expected to post earnings of $1.75 per share for the current quarter, representing a year-over-year change of +36.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.1%.

Delta has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.