A United Airlines plane flies in front of the Empire State Building and One Vanderbilt in New York City as it lands at Newark Liberty International Airport in Newark, New Jersey, December 3, 2021.
Gary Hershorn| Corbis News | Getty Images
United Airlines posted a record quarterly profit on Wednesday and forecast a strong third quarter on the back of an unrelenting travel boom led by a return in international travel.
The airline lost some capacity in the second quarter due to flight disruptions at its hub in Newark, New Jersey. But quarterly results and forecasts still beat analysts’ estimates due to strong demand.
Shares rose about 3% in extended trading following the report.
United is the second U.S. airline to report past quarter results, following suit Delta Airlinesoptimistic outlook for travel demand. US airlines reports profit before the market opens Thursday.
United and other airlines have expanded their international service to take advantage of strong bookings after a years-long pandemic slump. The airline’s revenue from international flights made up about 40% of total revenue, but is growing faster than domestic revenue.
This is what United reported for the second quarter compared to what Wall Street expected, based on average estimates compiled by Refinitiv:
- Adjusted earnings per share: $5.03 versus an expected $4.03
- The total turnover: $14.18 billion versus an expected $13.91 billion
United reported net income of $1.08 billion, or $3.24 per share, compared to $329 million, or $1 per share, in the same period last year. Adjusted for items including a pilot bonus as part of a new preliminary employment contract, the company earned $1.67 billion, or $5.03 per share.
A 26% lower fuel bill contributed to United’s profit.
Meanwhile, revenue per available seat mile fell 0.4% from a year earlier. Capacity was up 17.5% from Q2 2022, a percentage point below what United planned to fly before the Newark disruptions.
United CEO Scott Kirby said earlier this month that the company will have to reduce the number of flights at Newark Liberty International Airport. A series of early summer thunderstorms derailed United’s operation at the airport, disrupting thousands of flights and forcing passengers and crew to flee.
“The United team persevered through an unprecedented series of events at the end of last month,” Kirby said in a press release on Wednesday. “They are the best in the industry and we are focused on the important changes we can make, especially in Newark, to better serve our customers.”
Kirby said earlier this month that the airline will have to cut back on flying to the hub, which serves the New York City area, to avoid disruptions as flights back up at the congested airport.
Still, in the three months ended Sept. 30, United expects capacity growth of about 16% over last year and with an estimated revenue growth of as much as 13% over the same period in 2022. United expects to post third-quarter adjusted earnings per share of between $3.85 and $4.35, well above analyst estimates of $3.70 per share, according to Refinitiv.
Separately over the weekend, United and its pilot union said they had reached a tentative employment agreement that would give pilots a pay rise of as much as 40% over four years, a deal coming after years of talks.
The union estimates the deal is worth $10 billion. It has yet to be ratified by United’s 16,000 pilots, but could end years of negotiations as United seeks to increase its pilot ranks amid a pilot shortage.
The airline’s executives will meet with analysts at 10:30 a.m. ET on Thursday, when they’re likely to face questions on both topics.
