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United Airlines (UAL) Incurs Q1 Loss, Suffers Weak Load Factor
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Alike peers, namely, Delta Air Lines (DAL - Free Report) , American Airlines (AAL - Free Report) and Southwest Airlines (LUV - Free Report) , United Airlines (UAL - Free Report) suffers a setback when it reports first-quarter 2020 loss
The airline incurred a loss (excluding $4.29 from non-recurring items) of $2.57 per share, comparing favorably with the Zacks Consensus Estimate of a loss of $3.25. Results were hurt by the coronavirus-induced weakness in air-travel demand.
Even though operating revenues of $7,979 million decreased 16.8% year over year, the same marginally beat the Zacks Consensus Estimate of $7,976 million. The year-over-year plunge was due to the 19% decrease in passenger revenues, which accounted for bulk (88.5%) of the top line. Moreover, cargo revenues representing 3.3% of the top line declined 7.7%. Revenues from other sources contributed to the remainder.
United Airlines Holdings Inc Price, Consensus and EPS Surprise
Consolidated passenger revenue per available seat mile (PRASM: a key measure of unit revenues) decreased 12.8% year over year to 11.59 cents. Total revenue per available seat mile declined 10.4% year over year to 13.09 cents. On a consolidated basis, average yield per revenue passenger mile dipped 0.5% from the year-ago quarter.
During the quarter under review, consolidated airline traffic, measured in revenue passenger miles, decreased 18.7% year over year. Capacity (or available seat miles) contracted 7.2%. Consolidated load factor (percentage of seat occupancy) deteriorated 10 percentage points to 70.9% as traffic decline was more than capacity contraction. Meanwhile, average fuel price per gallon (on a consolidated basis) decreased 7.3% year over year to $1.90.
Total adjusted operating expenses inched up 1.8% year over year to $7,118 million in the reported quarter. Consolidated unit cost or cost per available seat mile (CASM) excluding fuel, third-party business expenses, profit sharing and special charges was up 9.7% year over year. Moreover, total unit costs increased 6.1% year over year.
United Airlines exited the first quarter with cash and cash equivalents of $3,442 million compared with $2,762 million at 2019 end. Long-term debt at the end of the reported quarter was $13,198 million compared with $13,145 million at 2019 end.
Other Details
The company anticipates daily cash burn (on average) in the $40-$45 million range during the second quarter of 2020. Moreover, this Zacks Rank #3 (Hold) Chicago-based carrier had $9.6 billion in liquidity as of Apr 29, 2020. The figure is inclusive of $2 billion under its undrawn revolving credit facility.
Moreover, the carrier reduced its adjusted capex guidance for 2020 by $2.5 billion in view of the coronavirus crisis. The current-year metric is now expected below $4.5 billion.
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United Airlines (UAL) Incurs Q1 Loss, Suffers Weak Load Factor
Alike peers, namely, Delta Air Lines (DAL - Free Report) , American Airlines (AAL - Free Report) and Southwest Airlines (LUV - Free Report) , United Airlines (UAL - Free Report) suffers a setback when it reports first-quarter 2020 loss
The airline incurred a loss (excluding $4.29 from non-recurring items) of $2.57 per share, comparing favorably with the Zacks Consensus Estimate of a loss of $3.25. Results were hurt by the coronavirus-induced weakness in air-travel demand.
Even though operating revenues of $7,979 million decreased 16.8% year over year, the same marginally beat the Zacks Consensus Estimate of $7,976 million. The year-over-year plunge was due to the 19% decrease in passenger revenues, which accounted for bulk (88.5%) of the top line. Moreover, cargo revenues representing 3.3% of the top line declined 7.7%. Revenues from other sources contributed to the remainder.
United Airlines Holdings Inc Price, Consensus and EPS Surprise
United Airlines Holdings Inc price-consensus-eps-surprise-chart | United Airlines Holdings Inc Quote
Operating Results
Consolidated passenger revenue per available seat mile (PRASM: a key measure of unit revenues) decreased 12.8% year over year to 11.59 cents. Total revenue per available seat mile declined 10.4% year over year to 13.09 cents. On a consolidated basis, average yield per revenue passenger mile dipped 0.5% from the year-ago quarter.
During the quarter under review, consolidated airline traffic, measured in revenue passenger miles, decreased 18.7% year over year. Capacity (or available seat miles) contracted 7.2%. Consolidated load factor (percentage of seat occupancy) deteriorated 10 percentage points to 70.9% as traffic decline was more than capacity contraction. Meanwhile, average fuel price per gallon (on a consolidated basis) decreased 7.3% year over year to $1.90.
Total adjusted operating expenses inched up 1.8% year over year to $7,118 million in the reported quarter. Consolidated unit cost or cost per available seat mile (CASM) excluding fuel, third-party business expenses, profit sharing and special charges was up 9.7% year over year. Moreover, total unit costs increased 6.1% year over year.
United Airlines exited the first quarter with cash and cash equivalents of $3,442 million compared with $2,762 million at 2019 end. Long-term debt at the end of the reported quarter was $13,198 million compared with $13,145 million at 2019 end.
Other Details
The company anticipates daily cash burn (on average) in the $40-$45 million range during the second quarter of 2020. Moreover, this Zacks Rank #3 (Hold) Chicago-based carrier had $9.6 billion in liquidity as of Apr 29, 2020. The figure is inclusive of $2 billion under its undrawn revolving credit facility.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Moreover, the carrier reduced its adjusted capex guidance for 2020 by $2.5 billion in view of the coronavirus crisis. The current-year metric is now expected below $4.5 billion.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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