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Why Is United Continental (UAL) Up 16.7% Since the Last Earnings Report?
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A month has gone by since the last earnings report for United Continental Holdings, Inc. (UAL - Free Report) . Shares have added about 16.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
First-Quarter Earnings
United Continental Holdings' first-quarter 2017 earnings (on an adjusted basis) of $0.41 per share beat the Zacks Consensus Estimate by $0.04. The bottom line, however, plunged 66.7% year over year due to higher costs.
Operating revenues of $8,420 million in the first quarter were marginally ahead of the Zacks Consensus Estimate of $8,362.5 million. Revenues increased 2.7% on a year-over-year basis.
Operating Results
Consolidated passenger revenue per available seat mile (PRASM or unit revenues) was flat at $0.12 on a year-over- year basis. Yield on a consolidated basis increased 0.4% from the first quarter of 2016, while passenger revenues increased 2.6% to $7,174 million. Cargo and other revenues increased 13.4% and 1.5%, respectively. During the reported quarter, airline traffic measured in revenue passenger miles, improved 2.2% year over year on a consolidated basis. Also, capacity (or available seat miles) grew 2.6%, which led to a 30 basis point decline in load factor (percentage of seats filled with passengers) to 79.6% because capacity expansion outweighed traffic growth.
Moreover, average fuel price (on a consolidated basis) per gallon, excluding hedge losses, increased 41.3% year over year to $1.71. Total operating expenses, excluding special items, grew 10% year over year to $8.1 billion. Consolidated unit cost or cost per available seat mile (CASM) – excluding fuel, third-party business expenses and profit sharing – increased 5% year over year, primarily due to the labor deals ratified.
Liquidity
United Continental exited the quarter with $6.4 billion in unrestricted liquidity, which included its $2 billion revolving credit facility. The carrier generated $547 million in operating cash flow in the quarter under review.
Guidance
United Continental expects consolidated PRASM to increase in the band of 1% to 3% in the second quarter. Consolidated capacity is projected to increase in the range of 3% to 4% in the second quarter of 2017. The company expects pre-tax margin (adjusted) in the range of 10%–12% and fuel price per gallon is expected in the band of $1.72 to $1.77 in the same period. In addition, unit costs (excluding Fuel, Profit Sharing & Third Party business costs) are anticipated to increase in the band of 4% to 5% due to higher labor costs.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There have been three revisions higher for the current quarter compared to three lower.
United Continental Holdings, Inc. Price and Consensus
At this time, United Continental's stock has a subpar Growth Score of 'D', however its Momentum is doing a lot better with an 'A'. Following the exact same course, the stock was allocated also 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 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and momentum investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Why Is United Continental (UAL) Up 16.7% Since the Last Earnings Report?
A month has gone by since the last earnings report for United Continental Holdings, Inc. (UAL - Free Report) . Shares have added about 16.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
First-Quarter Earnings
United Continental Holdings' first-quarter 2017 earnings (on an adjusted basis) of $0.41 per share beat the Zacks Consensus Estimate by $0.04. The bottom line, however, plunged 66.7% year over year due to higher costs.
Operating revenues of $8,420 million in the first quarter were marginally ahead of the Zacks Consensus Estimate of $8,362.5 million. Revenues increased 2.7% on a year-over-year basis.
Operating Results
Consolidated passenger revenue per available seat mile (PRASM or unit revenues) was flat at $0.12 on a year-over- year basis. Yield on a consolidated basis increased 0.4% from the first quarter of 2016, while passenger revenues increased 2.6% to $7,174 million. Cargo and other revenues increased 13.4% and 1.5%, respectively. During the reported quarter, airline traffic measured in revenue passenger miles, improved 2.2% year over year on a consolidated basis. Also, capacity (or available seat miles) grew 2.6%, which led to a 30 basis point decline in load factor (percentage of seats filled with passengers) to 79.6% because capacity expansion outweighed traffic growth.
Moreover, average fuel price (on a consolidated basis) per gallon, excluding hedge losses, increased 41.3% year over year to $1.71. Total operating expenses, excluding special items, grew 10% year over year to $8.1 billion. Consolidated unit cost or cost per available seat mile (CASM) – excluding fuel, third-party business expenses and profit sharing – increased 5% year over year, primarily due to the labor deals ratified.
Liquidity
United Continental exited the quarter with $6.4 billion in unrestricted liquidity, which included its $2 billion revolving credit facility. The carrier generated $547 million in operating cash flow in the quarter under review.
Guidance
United Continental expects consolidated PRASM to increase in the band of 1% to 3% in the second quarter. Consolidated capacity is projected to increase in the range of 3% to 4% in the second quarter of 2017. The company expects pre-tax margin (adjusted) in the range of 10%–12% and fuel price per gallon is expected in the band of $1.72 to $1.77 in the same period. In addition, unit costs (excluding Fuel, Profit Sharing & Third Party business costs) are anticipated to increase in the band of 4% to 5% due to higher labor costs.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There have been three revisions higher for the current quarter compared to three lower.
United Continental Holdings, Inc. Price and Consensus
United Continental Holdings, Inc. Price and Consensus | United Continental Holdings, Inc. Quote
VGM Scores
At this time, United Continental's stock has a subpar Growth Score of 'D', however its Momentum is doing a lot better with an 'A'. Following the exact same course, the stock was allocated also 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 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and momentum investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.