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United (UAL) Down 8% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for United Airlines (UAL - Free Report) . Shares have lost about 8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is United due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat in Q2
UAL reported second-quarter 2024 earnings per share (excluding 18 cents from non-recurring items) of $4.14, which surpassed the Zacks Consensus Estimate of $3.97. Earnings decreased 17.7% on a year-over-year basis.
Operating revenues of $14.98 billion missed the Zacks Consensus Estimate of $15.13 billion. The top line increased 5.7% year over year due to upbeat air-travel demand. This was driven by a 5.2% rise in passenger revenues (which accounted for 91.2% of the top line) to $13.680 billion. Almost 44,375 passengers traveled on UAL flights in the second quarter, up 5.8% year over year.
Cargo revenues grew 14.4% year over year to $414 million. Revenues from other sources jumped 9.6% from the second quarter of 2023 to $892 million.
Other Details of Q2
Below, we present all comparisons (in % terms) with the second quarter of 2023 figures unless otherwise stated.
Airline traffic, measured in revenue passenger miles, grew 5.5%. Capacity, measured in available seat miles, expanded 8.3%. As traffic failed to outpace capacity expansion, the consolidated load factor (percentage of seat occupancy) fell 2.2 percentage points to 84.2%.
Consolidated passenger revenue per available seat mile (a key measure of unit revenues) inched down 2.9%. Total revenue per available seat mile fell 2.4% to 18.81 cents. The average yield per revenue passenger mile fell 0.3% to 20.40 cents.
Average aircraft fuel price per gallon grew 3.8% to $2.76. Fuel gallons consumed were up 6.8%.
Operating expenses (on a reported basis) increased 3.1% to $13.057 billion. Consolidated unit cost or cost per available seat mile (CASM), excluding fuel, third-party business expenses, profit-sharing and special charges, increased 2.1% to 12.10 cents.
UAL exited the second quarter with cash and cash equivalents of $10.864 billion compared with $8.401 billion at the first-quarter end. Long-term debt was $21.687 billion compared with $23.059 billion at the end of the prior quarter.
Outlook
For the third quarter of 2024, UAL expects adjusted EPS in the range of $2.75-$3.25. For 2024, adjusted EPS is expected to be between $9 and $11. Adjusted capital expenditures are expected to be around $6.5 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -17.13% due to these changes.
VGM Scores
Currently, United has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, United has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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United (UAL) Down 8% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for United Airlines (UAL - Free Report) . Shares have lost about 8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is United due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat in Q2
UAL reported second-quarter 2024 earnings per share (excluding 18 cents from non-recurring items) of $4.14, which surpassed the Zacks Consensus Estimate of $3.97. Earnings decreased 17.7% on a year-over-year basis.
Operating revenues of $14.98 billion missed the Zacks Consensus Estimate of $15.13 billion. The top line increased 5.7% year over year due to upbeat air-travel demand. This was driven by a 5.2% rise in passenger revenues (which accounted for 91.2% of the top line) to $13.680 billion. Almost 44,375 passengers traveled on UAL flights in the second quarter, up 5.8% year over year.
Cargo revenues grew 14.4% year over year to $414 million. Revenues from other sources jumped 9.6% from the second quarter of 2023 to $892 million.
Other Details of Q2
Below, we present all comparisons (in % terms) with the second quarter of 2023 figures unless otherwise stated.
Airline traffic, measured in revenue passenger miles, grew 5.5%. Capacity, measured in available seat miles, expanded 8.3%. As traffic failed to outpace capacity expansion, the consolidated load factor (percentage of seat occupancy) fell 2.2 percentage points to 84.2%.
Consolidated passenger revenue per available seat mile (a key measure of unit revenues) inched down 2.9%. Total revenue per available seat mile fell 2.4% to 18.81 cents. The average yield per revenue passenger mile fell 0.3% to 20.40 cents.
Average aircraft fuel price per gallon grew 3.8% to $2.76. Fuel gallons consumed were up 6.8%.
Operating expenses (on a reported basis) increased 3.1% to $13.057 billion. Consolidated unit cost or cost per available seat mile (CASM), excluding fuel, third-party business expenses, profit-sharing and special charges, increased 2.1% to 12.10 cents.
UAL exited the second quarter with cash and cash equivalents of $10.864 billion compared with $8.401 billion at the first-quarter end. Long-term debt was $21.687 billion compared with $23.059 billion at the end of the prior quarter.
Outlook
For the third quarter of 2024, UAL expects adjusted EPS in the range of $2.75-$3.25. For 2024, adjusted EPS is expected to be between $9 and $11. Adjusted capital expenditures are expected to be around $6.5 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -17.13% due to these changes.
VGM Scores
Currently, United has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, United has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.