United Airlines ( NASDAQ: UAL ) is scheduled to announce Q3 earnings results on Tuesday, October 18th, after market close.
The consensus EPS Estimate is $2.28 (+323.5% Y/Y) and the consensus Revenue Estimate is $12.74B (+64.4% Y/Y).
Earnings History : The airlines turned profitable in Q2 but missed the consensus mark .
But CEO Scott Kirby said it was focused on confronting three risks that could grow over the next 6-18 months: industry-wide operational challenges, record fuel prices, and the increasing possibility of a global recession.
Over the last 2 years, UAL has beaten EPS estimates 38% of the time and has beaten revenue estimates 38% of the time.
Over the last 3 months, EPS estimates have seen 4 upward revisions and 5 downward. Revenue estimates have seen 5 upward revisions and 2 downward.
Company's Outlook : For Q3, the company said it expects total operating revenue to be up around 12% vs. 3Q19 and prior outlook of +11%. Capacity to be down 10% to 11% vs. 3Q19. Adjusted operating margin to be ~10.5% vs. prior outlook of 10%.
The company continues to expect to be profitable for FY2022 even with higher fuel prices a big consideration. UAL is also confident that it can hit a target of 9% adjusted pretax margin in 2023 and 14% by 2026.
Analyst Ratings : Barclays analyst Brandon Oglenski cuts price target to $39 from $45 and maintains an Equal Weight rating on the shares. The analyst says that despite "likely favorable" near-term revenue outlooks by most airlines, he materially reduced 2023 earnings forecasts reflecting softer demand expectations and recently higher fuel prices. The Q3 earnings season could bring some brighter news on U.S. travel demand "relative to a more somber transport outlook," Oglenski tells investors in a research note. However, he reduced airline demand expectations in 2023 with EBITDAR estimates coming down roughly 20%.
Peer Delta ( DAL ) reported mixed Q3 earnings on last Thursday and sees Q4 capacity up by ~5% to 9% vs. 4Q19; Operating Margin: to be 9% to 11%; EPS between $1 to $1.25 vs. consensus of $0.80. Overall, DAL is on track to achieve 2024 targets of over $7 EPS and $4B of free cash flow.
UAL is down 21.5% since the start of 2022 but not as steep as the S&P 500’s -24% .
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Will fewer flights and higher prices to combat rising wages and fuel prices help United Airlines take off in Q3?