United Airlines cleared third-quarter estimates late Tuesday and announced a sizeable stock buyback plan ahead of its investor call Wednesday morning. The results come after Delta Air Lines posted a 26% earnings decline last week that missed estimates. UAL stock was little changed overnight after rising Tuesday.
United Airlines Earnings
United Airlines reported earnings of $3.33 per share adjusted, down from $3.65 last year. Revenue rose 2.5% to $14.8 billion.
FactSet expected United Airlines earnings of $3.17 per share on $14.77 billion in revenue.
Total revenue per available seat mile eased 1.6% from last year while capacity rose 4.1%.
CEO Scott Kirby in the release said that "unproductive capacity left the market in mid-August, and we saw a clear inflection point in our revenue trends."
United also noted that domestic unit revenue was positive year-over-year in August and September. Revenue for basic economy flights was up 20% during the quarter, while premium revenue was up 5% from last year.
United sees adjusted Q4 EPS of $2.50-$3, with the midpoint in line with FactSet estimates for $2.76.
The company's board also announced a new $1.5 billion share repurchase program in the release.
International Expansion, Lifted Targets
United on Thursday added eight new destinations to its summer 2025 schedule, marking the largest international expansion in company history. The new destinations include Ulaanbaatar, Mongolia; Kaohsiug, Taiwan; Nuuk, Greenland; Palermo, Italy; Bilbao, Spain; Madeira Island, Portugal; Faro, Portugal; and Dakar, Senegal. The airline also added new routes to existing destinations. Summer 2025 will be United's largest-ever trans-Atlantic schedule, with more than 760 weekly flights to over 40 destinations, United Airlines said.
Meanwhile, Susquehanna last Wednesday also lifted its price target on United stock by $10 to 70 and maintained a positive rating on the shares. Looking into Q4 and 2025, the firm said it sees an "increasingly constructive setup" for industry revenue per available seat mile, while demand remains at "healthy levels."
Delta and United Airlines remain Susquehanna's top picks. But the analysts wrote that they see a "dynamic" operating landscape heading into 2025, with potential opportunities within low-cost carriers and the ultra-low-cost space.
United Airlines Stock
United Airlines stock was flat after hours Tuesday.
The stock climbed 0.8% Tuesday to mark four consecutive gains.
Shares have rallied for 10 straight weeks.
Plunging oil prices buoyed United and other airline stocks Tuesday, raising hopes for lower fuel costs. The general decline in oil prices in recent months — aside from a rebound in the latter half of September — has been a tailwind for the sector.
UAL stock has rallied 55% this year and is extended from a mid-September breakout.
Delta Air Lines stock eased slightly Tuesday, dipping in a buy zone for a cup-with-handle base. DAL stock broke out above the 52.45 buy point on Monday.
Delta shares are up more than 31% in 2024.
American Airlines gained 1.4% Tuesday to trend back toward its 200-day moving average. America is set to report earnings on Oct. 24.
AAL stock has fallen more than 12% so far this year.
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