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Is United (UAL) Set to Beat Q1 Earnings Estimates?

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Shares of United (UAL - Free Report) climbed on Friday just a few trading days before the release of its first quarter financial results, which might indicate that investors are expecting strong results from the airline giant.

Before Friday’s gains, shares of United had been down 5.8% over the last four weeks. Some of this decline can be attributed to worries that a trade war between the U.S. and China could negatively impact United. But these more recent, broader market concerns are not the only reason that United’s stock price has slumped.

United stock is down 4.3% over the last year and suffered a long downturn last summer, which might indicate more fundamental-related worries. Coupled with the current uncertainty and volatility, investors need to be even more cautious and informed about United ahead of earnings.

The basic idea is that during market uncertainty investors should be on the hunt for stocks that are expected to report strong Q1 earnings results and avoid ones that might underwhelm.

With that said, let’s take a closer look at United’s current estimates to understand what to expect from the airline company’s upcoming first quarter financial results, and see if an earnings beat might be in the cards.

Q1 Outlook

United’s Q1 revenues are projected to climb by nearly 7% to reach $9 billion, based on our current Zacks Consensus Estimates. On the other hand, United’s quarterly earnings are expected to fall 5% from the year-ago period to hit $0.38 per share.

However, United has earned seven earnings estimate revisions, with 100% agreement to the upside, all within the last 60 days.

Still, this doesn’t give investors any idea if United is actually projected to top our current earnings estimate. Luckily, Zacks Premium customers can utilize the Earnings ESP Screener in order to search for stocks that are expected to surprise.

This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.

A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.

With that said, United has earned five upward earnings estimate revisions within the last seven days, with no downward revisions. This upped United’s Most Accurate Estimate by 4 cents to $0.42 per share. United is also currently a Zacks Rank #3 (Hold) and sports an Earnings ESP of 9.43%.

The airline power’s current Zacks Rank and positive Earnings ESP means that investors should consider United a stock that could be poised to beat Q1 earnings estimates.

United is expected to report its Q1 earnings results after market close on Tuesday, April 17. 

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