United Airlines (UAL Quick QuoteUAL - Free Report) reported solid first-quarter 2026 results on April 21, with both earnings and revenues surpassing expectations and improving year over year. Adjusted earnings per share (EPS) of $1.19 (excluding 95 cents from non-recurring items) beat the Zacks Consensus Estimate of $1.08 and rose 30.8% from the prior-year period.

The figure also fell within the company’s guided range of $1.00–$1.50. Operating revenues came in at $14.6 billion, ahead of the $14.3 billion estimate and up 10.5% year over year.

However, United Airlines cut its 2026 earnings forecast to an adjusted $7 to $11 a share, down from $12 to $14 a share at the start of the year, before the U.S. and Israel attacked Iran. The stock slumped 5.6% on April 22, reflecting the move.

Passenger Revenue Drives Growth

Passenger revenues, which accounted for 90.1% of total revenue, increased 11% year over year to $13.1 billion. Cargo revenues declined 1.6% year over year to $422 million, while other revenues rose 10.5% to $1.02 billion.

The company recorded its highest-ever first-quarter revenue, with positive PRASM (passenger revenue per available seat mile) growth across all regions.

Costs Rise Amid Higher Fuel Prices

Operating expenses increased 8% year over year. Fuel prices rose sharply, with the average cost per gallon increasing 9.9% to $2.78, while fuel consumption grew 2.4%. Unit costs (excluding fuel and certain expenses) edged up 5.9% to 13.95 cents (read: Risks Aren't Fading in the Energy Markets: ETFs to Gain).

Outlook Reflects Fuel Uncertainty

For the second quarter of 2026, United Airlines expects adjusted EPS between $1.00 and $2.00, with the consensus estimate of $1.91 falling within this range (read: 4 Sector ETFs for 2Q 2026).

However, the company lowered its full-year 2026 EPS guidance to $7.00–$11.00 from the prior $12.00–$14.00 range. The consensus estimate of $7.95 aligns with the revised outlook.

United expects to offset rising fuel costs gradually. United Airlines expects to recover 40-50% of the fuel price increase in the second quarter, 70-80% of the fuel price increase in the third quarter and 85-100% of the fuel price increase in the fourth quarter of 2026 through its revenues.

Bottom Line

United Airlines delivered a strong first quarter, driven by robust demand and diversified revenue streams. However, elevated fuel costs and a more cautious full-year outlook mark the challenges ahead for the airline industry.

The Zacks Consensus Estimate for June quarter earnings is $1.91 at the time of writing, while the Most Accurate Estimate is $1.39, resulting in a negative Earnings ESP of 27.06%. Earnings ESP (Expected Surprise Prediction) is Zacks' proprietary methodology for determining which stocks have the best chance to surprise with their next earnings announcement.

Is There Any Bright Point?

Although the guidance has been revised lower, the cut outlook aligns with the latest Zacks Consensus Estimate of $7.95. A month before, analysts had expected full-year earnings to be $12.66. It means the fuel-led dour scenario has already been priced into UAL’s share price.

Note that UAL stock is down 18.9% year to date. Since the start of the Iran war, UAL shares have lost about 8.5% till April 8, 2026 – the day when a two-week truce in the Iran–United States conflict was announced.

UAL stock has an upbeat Value Score of A and moderate Momentum and Growth Scores of C, resulting in a good VGM score of B. While we believe a part of the negative narratives is baked into the current valuation, the possibility of further downside is present as the fallout of the Iran war is far from over.

ETF in Focus

Against this backdrop, investors can play the stock with a basket approach and bet on the U.S. Global Jets ETF (JETS Quick QuoteJETS - Free Report) . The fund invests about 10% of its weight in UAL shares. The ETF approach minimizes the company-specific concentration risk.