Earnings Results: United Airlines says travel demand is stronger than recession pressures; shares rally

by | Oct 18, 2022 | Stock Market

United Airlines Holdings Inc. stock rallied after hours Tuesday after the airline said it expected the travel rebound to weather a shakier economy in the months ahead and reported third-quarter results that beat expectations. “Looking forward through the end of the year, the airline expects the strong COVID recovery trends to continue to overcome the recessionary pressures in the macroeconomic environment,” company executives said in a statement.

That backdrop — along with tighter flight networks and changes in how people work — helped justify the airline’s more upbeat forecast for the fourth quarter. United Airlines
UAL,
+3.19%
said it expected adjusted fourth-quarter operating margin of around 10%, the first time the figure would end above pre-pandemic 2019 levels. United also forecast adjusted fourth-quarter earnings per share of between $2.00 and $2.25, well above FactSet forecasts for 98 cents per share. The carrier also said it expected a 24% to 25% gain in total fourth-quarter unit revenue — a much-watched industry metric that measures sales as spread out across an airline’s flight capacity — when compared to the same period in 2019. Adjusted fourth-quarter unit costs were seen up between 11% and 12%, and roughly 15% for the full year, when compared to the respective periods i …

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