A United Airlines Boeing 787-10 Dreamliner takes off from Barcelona Airport on March 28, 2023 in Barcelona.
Jean Vals | Null Photo | Getty Images
United Airlines said rising jet fuel prices and the suspension of Tel Aviv flights amid the Israel-Hamas war will weigh on profits in the final three months of the year.
The Chicago-based airline is expected to report adjusted earnings of $1.50 to $1.80 per share for the current quarter, below analysts’ expectations of $2.06.
In that case, United’s adjusted earnings would be between $9.55 and $9.85 per share, which would be lower than its prior earnings. forecast Based on fourth-quarter estimates, it will be between $11 and $12 per share in July. Jet fuel prices at major U.S. airports have increased nearly 25% since the beginning of the summer.
The company’s shares fell about 4% in after-hours trading.
United Airlines and other U.S. and international airlines suspended flights to Israel earlier this month. United had more flights to Israel than any other U.S.-based airline serving Washington, D.C., Newark, New Jersey, and San Francisco.
United Airlines said fourth-quarter revenue would increase 9% year over year if the Israeli flight suspension continues through the end of the year, and 10.5% if the suspension continues through October. United Airlines said costs excluding fuel are likely to rise 3.5% to 5% in the fourth quarter of 2022.
The suspension comes after a strong summer for air travel, with international revenue growth outpacing domestic ticket sales. That puts major global carriers like United Airlines and Delta Air Lines in a better position than some low-cost carriers like Spirit, which focuses on U.S. cities and is expected to lose money.
what is this reported by United Comparison to Wall Street expectations for Q3 based on average estimates compiled by LSEG (formerly Refinitiv):
- Adjusted earnings per share: $3.65 versus expected $3.35
- Total income: $14.48 billion vs. expected $14.44 billion
United Airlines’ third-quarter net income was $1.14 billion, or $3.42 per share, compared with $942 million, or $2.86 per share, in the year-ago period. Adjusted for one-time items, United Airlines reported earnings of $3.65 per share.
Revenue increased from $12.88 billion to $14.48 billion.
The airline will hold a conference call with analysts and media at 10:30 a.m. ET on Wednesday to ask questions about fourth-quarter demand and how airlines plan to limit rising costs.
