Why United Airlines Stock Is Flying Higher After Earnings
United Airlines beat expectations for the first quarter and its stock is by soaring. Here's what you need to know.
United Airlines (UAL) stock is flying higher Wednesday after the company beat analysts' top- and bottom-line estimates for its first quarter.
In the three months ended March 31, United's total operating revenue increased 9.7% year-over-year to $12.5 billion while its per-share loss narrowed to 15 cents from 63 cents in the year-ago period.
However, it added that its first-quarter results reflected an impact of approximately $200 million from the grounding of the Boeing 737 MAX 9. Without this impact, the company said it would have reported a quarterly profit.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
United's results exceeded analysts’ expectations, which called for revenue of $12.45 billion and a loss of 57 cents per share, according to CNBC.
The results also beat the guidance United provided for the first quarter, which called for a loss of 35 cents to 85 cents per share.
As a result of its strong performance in the first quarter, United reiterated its full-year forecast for EPS to arrive between $9 and $11.
"I want to thank the United team for working so hard this quarter to deliver strong operational metrics for our customers and sharpen our focus on safety, while producing excellent financial results for our shareholders," United Airlines CEO Scott Kirby said in a statement. "We've adjusted our fleet plan to better reflect the reality of what the manufacturers are able to deliver. And, we'll use those planes to capitalize on an opportunity that only United has: profitably grow our mid-continent hubs and expand our highly profitable international network from our best in the industry coastal hubs."
For the second quarter, United expects earnings in the range of $3.75 per share to $4.25 per share, which exceeds the consensus analyst estimate of $3.71 per share.
Analysts see more upside for UAL stock
Analysts are overwhelmingly bullish on the industrial stock. According to S&P Global Market Intelligence, the consensus analyst target price for UAL stock is $62.46, representing an upside of more than 30% from current levels. Additionally, the consensus recommendation is Buy.
Speaking for the bulls is Argus Research analyst John Staszak, who maintained a Buy rating on United Airlines stock after earnings.
"We expect demand for air travel to continue its post-pandemic recovery, with strong growth in international travel, and look for higher revenues to outweigh inflationary headwinds," Staszak says. "We also expect the company to benefit from constrained industry capacity due to the grounding of the Boeing 737 MAX 9."
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
Stock Market Today: Stocks Hit Record High Ahead of CPI Report
Equities caught a bid ahead of the all-important September reading on consumer price inflation.
By Dan Burrows Published
-
Best 529 Plans of 2024
Check out the best 529 plans of 2024 and find the best plan for your child or grandchild’s college savings.
By Erin Bendig Published
-
Stock Market Today: Stocks Hit Record High Ahead of CPI Report
Equities caught a bid ahead of the all-important September reading on consumer price inflation.
By Dan Burrows Published
-
How to Create a Retirement Plan That Checks All Your Boxes
You might consider starting with a model retirement plan that has already been assembled and is ready to be refined to meet your objectives.
By Jerry Golden, Investment Adviser Representative Published
-
Why Gen X Marks the Spot for Rethinking Retirement
Retirement plans that worked for Baby Boomers may not fit the bill for Gen Xers. If you're nearing 60, it's time to bring your retirement strategy up to date.
By Chris Blunt Published
-
Want to Turn Your Tax Bill Into a Refund? What to Do Now
A few easy steps can help you avoid writing a check to the IRS. And if your most recent refund was a whopper, you might want to consider a few adjustments.
By Isaac Morris Published
-
FTC Cracks Down: Fake Reviews Officially a No-No
Companies can no longer buy and post online reviews that aren't by actual customers — and there's a hefty fine involved. Here's what to watch for.
By H. Dennis Beaver, Esq. Published
-
Stock Market Today: Tech Leads Stocks to Broad-Based Gains
Risk appetite came back with a vengeance as oil and bonds took a breather.
By Dan Burrows Last updated
-
Election Could Reshape Opportunity Zones and 1031 Exchanges
Trump and Harris have divergent approaches to qualified opportunity zones and 1031 exchanges. See how each could fare under their administrations.
By Daniel Goodwin Published
-
Six Reasons to Have Life Insurance
The peace of mind from knowing your family is financially protected if something happens to you is invaluable, but there are other compelling reasons, too.
By Anthony Martin Published