United Airlines delivered an outlook pressured by the Israel-Hamas war after beating earnings estimates for the third quarter. UAL stock plunged to a new low amid a slew of price-target cuts.
United Airlines Earnings, Outlook
The airline's flights to Tel Aviv could be suspended through October or even through year-end, United said. It expects to earn $1.50 to $1.80 per share for the current fourth quarter, depending on the length of suspension. It cited both higher fuel- and non-fuel costs as well. The forecast fell below FactSet consensus estimates of $2.05.
For the third quarter, United reported EPS of $3.65 vs. expectations for $3.38, FactSet shows. It generated record quarterly revenue of $14.48 billion vs. an expected $14.43 billion.
Year over year, United earnings rose 30% per share and revenue was up 12.5%. But sales growth slowed for the ninth consecutive quarter.
The airline giant cited strength in both domestic and international markets. It also highlighted "great success in the premium economy cabin where revenue has outpaced capacity growth since its introduction in 2019."
UAL Stock Hits 52-Week Low
Shares of United Airlines tanked 9.7% to 36.24 in Wednesday's stock market action. UAL stock hit a 52-week low intraday. United stock lost steam starting this summer after a big rally in the first half of 2023.
Since Palestine-based Hamas launched its Oct. 7 attack on Israel, many major airlines have stopped flights to Israel, including Delta Air Lines and American Airlines. Last week, prior to the Middle East conflict, Delta beat earnings views and gave a solid outlook.
U.S. Global Jets ETF lost more than 4% Wednesday and is down 8% for the month so far.
At least six analysts on Wall Street cut price targets on United Airlines stock after the third-quarter earnings report, FactSet shows. No one raised.
