Prime Highlights
- United beat Q2 estimates with adjusted EPS of $1.99 vs $1.88 expected, revenue at $17.67 billion.
- United raised its full-year earnings forecast to $9-$11 a share, citing strong travel demand.
Key Facts
- United Airlines is a major US carrier with a global route network.
- Unit revenue grew 12.1% in Q2, the strongest pace since early 2023.
Background
United Airlines posted stronger-than-expected second-quarter results, with earnings and revenue both beating Wall Street estimates despite rising fuel costs.
The airline reported adjusted earnings per share of $1.99, ahead of the $1.88 analysts had projected. Revenue climbed 16% from a year earlier to $17.67 billion, surpassing the expected $17.61 billion. Total unit revenue rose 12.1% in the quarter, marking its strongest growth since early 2023, according to FactSet data.
United expanded its flying capacity by 3.5% during the quarter. The carrier reported higher revenue across premium, corporate and no-frills basic economy tickets, along with rising unit revenue on both domestic and international routes.
Net income for the quarter stood at $805 million, or $2.46 a share. Adjusted net income came in at $649 million.
For the third quarter, United forecast adjusted earnings per share between $2.50 and $3.50. It also raised the lower end of its full-year adjusted earnings forecast to a range of $9 to $11 a share, up from the $7 to $11 range projected in April.
Jet fuel prices at major US airports rose 34% in July alone, driven by escalating tensions between the US and Iran, industry data showed. United said the higher fuel costs could add nearly $6 billion to its expenses this year compared with initial projections, with second-quarter fuel costs up 84% from last year to $2.3 billion.
The airline said it plans to pass on up to 90% of these higher costs to customers this quarter and all of it by the fourth quarter. Rival Delta Air Lines is also raising fares to offset rising fuel expenses. Both carriers noted that demand has remained strong despite higher fares.
