United Airlines Holdings Inc. predicted first-quarter profit well ahead of Wall Street’s estimates as the carrier capitalizes on unusually strong demand for premium and international travel during the winter months.
Adjusted earnings will be 75 cents to $1.25 a share in the current period, the airline said late Tuesday while reporting better-than-expected earnings for the final months of 2024. Even at the low end, the forecast tops the 56 cents expected on average by analysts.
“United reported an impressive set of results,” Tom Fitzgerald, a TD Cowen analyst, said in a note. “United is navigating the higher operating cost environment well and making the right investments.”
The carrier’s shares rose 4% before the start of regular trading Wednesday in New York, lifting the stocks of rivals American Airlines Group Inc. and Delta Air Lines Inc. A post-earnings bounce would add to United’s 135% rally last year.
The upbeat outlook echoes a similarly bullish report earlier this month from Delta, suggesting travel demand will remain above historic norms in what’s typically the industry’s weakest period, after the December holidays and as schools reopen. United last turned a first-quarter profit in 2019.
The carrier, like Delta, cited particular strength in trips across the Atlantic – flights that account for about 20% of United’s revenue, according to Bank of America. American, another major international carrier, is slated to report earnings later this week.
Travel demand is “continuing to accelerate,” United Chief Executive Officer Scott Kirby said in a statement. This year, the carrier plans 800 daily flights to and from 147 international destinations, up from 700 in 2024.
Higher fares
US carriers are also benefiting from higher fares after domestic discount airlines slashed unprofitable routes that weighed on ticket prices over the summer. In its recent report, Delta cited a healthier balance between industry flying plans and travel demand that should continue through the spring.
Rising sales throughout United’s aircraft cabins helped lift fourth-quarter adjusted earnings to $3.26 a share, topping the $3.05 average of analysts’ estimates compiled by Bloomberg. Revenue jumped to $14.7 billion, driven by a 20% gain in basic economy sales and 10% lift from premium fares.
United expects a full-year adjusted profit of $11.50 to $13.50 a share, compared to the $12.84 average of analyst estimates.