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United Continental's (UAL) Q3 Earnings Miss, Revenues Beat
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United Continental Holdings, Inc. (UAL - Free Report) reported mixed results in the third quarter of 2018. The company’s earnings (on an adjusted basis) of $3.06 per share fell short of the Zacks Consensus Estimate of $3.09. However, the bottom line increased year over year despite high fuel costs.
Operating revenues came in at $11,003 million, which outpaced the Zacks Consensus Estimate of $10,956.4 million. Moreover, the top-line figure was up 11.2% year over year.
Passenger revenues, which increased 11.6% highlighting the strong demand for air travel, accounted for bulk (92%) of the top line. Cargo revenues rose 6.1%, accounting for 2.7% of the top line. The balance came from other operating revenues.
Operating Results
The company reported a year-over-year rise of 6.1% in consolidated passenger revenue per available seat mile (PRASM: a key measure of unit revenues) to 13.73 cents. Total revenue per available seat mile increased 5.7% to 14.93 cents. On a consolidated basis, average yield per revenue passenger mile inched up 4.1% from the year-ago quarter.
During the reported quarter, consolidated airline traffic — measured in revenue passenger miles — improved 7.2% year over year. Capacity (or available seat miles) rose 5.1%. Consolidated load factor (percentage of seat occupancy) was up 160 basis points to 86% as traffic growth outweighed capacity expansion. Average fuel price per gallon (on a consolidated basis) escalated 36.5% year over year to $2.32.
Total operating expenses rose 11.9% year over year to $9,800 million in the third quarter. Consolidated unit cost or cost per available seat mile (CASM) — excluding fuel, third-party business expenses, profit sharing and special charges — dipped 0.4% year over year. United Continental generated $98 million as free cash flow (adjusted) at the end of the third quarter.
United Continental Holdings, Inc. Price, Consensus and EPS Surprise
The company anticipates capacity to expand between 5% and 6% while pre-tax margin (adjusted) is estimated to lie in the range of 5-7%. Passenger unit revenues are projected to increase 3-5% year over year. Additionally, United Continental predicts consolidated CASM — excluding third-party business expenses, fuel & profit sharing — to either remain flat or decline up to 1% year over year.
Meanwhile, consolidated average aircraft fuel price per gallon is anticipated between $2.41 and $2.46. Effective income tax rate for the quarter under review is likely to be in the 20-21% band.
Full-Year Outlook
United Continental now expects 2018 earnings between $8 and $8.75 per share (earlier outlook projected 2018 earnings in the range of $7.25 to $8.75 per share). The Zacks Consensus Estimate for full-year earnings is pegged at $8.16 per share. The revenue outperformance in the third quarter and the bullish full-year earnings guidance seemed to have pleased investors, as a result the stock gained in after-market trading on Oct 16. Full-year capacity is anticipated to grow approximately 4.9%.
United Continental is well on track to achieve its 2020 adjusted earnings per share guidance range of $11 -$13.
Upcoming Releases
Investors interested in the Zacks Transportation sector are keenly awaiting third-quarter earnings reports from key players like Kansas City Southern , JetBlue Airways Corporation (JBLU - Free Report) and Allegiant Travel Company (ALGT - Free Report) in the coming days. While Kansas City Southern is scheduled to report on Oct 19, JetBlue and Allegiant are scheduled to release financial numbers on Oct 23 and Oct 24, respectively.
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New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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United Continental's (UAL) Q3 Earnings Miss, Revenues Beat
United Continental Holdings, Inc. (UAL - Free Report) reported mixed results in the third quarter of 2018. The company’s earnings (on an adjusted basis) of $3.06 per share fell short of the Zacks Consensus Estimate of $3.09. However, the bottom line increased year over year despite high fuel costs.
Operating revenues came in at $11,003 million, which outpaced the Zacks Consensus Estimate of $10,956.4 million. Moreover, the top-line figure was up 11.2% year over year.
Passenger revenues, which increased 11.6% highlighting the strong demand for air travel, accounted for bulk (92%) of the top line. Cargo revenues rose 6.1%, accounting for 2.7% of the top line. The balance came from other operating revenues.
Operating Results
The company reported a year-over-year rise of 6.1% in consolidated passenger revenue per available seat mile (PRASM: a key measure of unit revenues) to 13.73 cents. Total revenue per available seat mile increased 5.7% to 14.93 cents. On a consolidated basis, average yield per revenue passenger mile inched up 4.1% from the year-ago quarter.
During the reported quarter, consolidated airline traffic — measured in revenue passenger miles — improved 7.2% year over year. Capacity (or available seat miles) rose 5.1%. Consolidated load factor (percentage of seat occupancy) was up 160 basis points to 86% as traffic growth outweighed capacity expansion. Average fuel price per gallon (on a consolidated basis) escalated 36.5% year over year to $2.32.
Total operating expenses rose 11.9% year over year to $9,800 million in the third quarter. Consolidated unit cost or cost per available seat mile (CASM) — excluding fuel, third-party business expenses, profit sharing and special charges — dipped 0.4% year over year. United Continental generated $98 million as free cash flow (adjusted) at the end of the third quarter.
United Continental Holdings, Inc. Price, Consensus and EPS Surprise
United Continental Holdings, Inc. Price, Consensus and EPS Surprise | United Continental Holdings, Inc. Quote
Q4 Outlook
The company anticipates capacity to expand between 5% and 6% while pre-tax margin (adjusted) is estimated to lie in the range of 5-7%. Passenger unit revenues are projected to increase 3-5% year over year. Additionally, United Continental predicts consolidated CASM — excluding third-party business expenses, fuel & profit sharing — to either remain flat or decline up to 1% year over year.
Meanwhile, consolidated average aircraft fuel price per gallon is anticipated between $2.41 and $2.46. Effective income tax rate for the quarter under review is likely to be in the 20-21% band.
Full-Year Outlook
United Continental now expects 2018 earnings between $8 and $8.75 per share (earlier outlook projected 2018 earnings in the range of $7.25 to $8.75 per share). The Zacks Consensus Estimate for full-year earnings is pegged at $8.16 per share. The revenue outperformance in the third quarter and the bullish full-year earnings guidance seemed to have pleased investors, as a result the stock gained in after-market trading on Oct 16. Full-year capacity is anticipated to grow approximately 4.9%.
United Continental is well on track to achieve its 2020 adjusted earnings per share guidance range of $11 -$13.
Upcoming Releases
Investors interested in the Zacks Transportation sector are keenly awaiting third-quarter earnings reports from key players like Kansas City Southern , JetBlue Airways Corporation (JBLU - Free Report) and Allegiant Travel Company (ALGT - Free Report) in the coming days. While Kansas City Southern is scheduled to report on Oct 19, JetBlue and Allegiant are scheduled to release financial numbers on Oct 23 and Oct 24, respectively.
Zacks Rank
United Continental carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>