A United Airlines Boeing 737 Max 9 aircraft lands at San Francisco International Airport on March 13, 2019.
Justin Sullivan | Getty Images
united airlines On Monday, the company predicted a loss in the first quarter due to the Federal Aviation Administration’s grounding of flights. boeing Up to nine 737 planes had parts explode during accidents this month. alaska airlines Flights operated by that type of aircraft.
United Airlines said in a filing that it expects to post an adjusted loss of 35 cents to 85 cents per share in the first three months of this year. The forecast, announced the day after the Jan. 5 Alaska Airlines Flight 1282 disaster, is the first to give investors an indication of the economic damage caused by the FAA’s grounding of aircraft.
United Airlines has 79 aircraft in its fleet, more than any other airline, followed by Alaska Airlines. United Airlines said Monday that it expects its planes to remain grounded until Jan. 26, but its forecast assumes it will not be able to fly any planes this month.
Both airlines canceled hundreds of flights this month while their planes were grounded for inspection. The more common Boeing 737 Max 8 owned by United Airlines is American and southwestis not affected by grounding order.
United Airlines said it expects unit costs, excluding fuel, to rise mid-single-digit percentage points year-over-year in the first quarter, with three percentage points of the impact coming from the grounding of the Max. It expected unit revenue to be flat in the first three months of the year.
United Airlines’ first-quarter warning comes after a relatively strong holiday period, although the airline faced several winter storms in the first few weeks of January.
United shares rose more than 6% in after-hours trading.
For the final three months of 2023, United Airlines posted a net profit of $600 million, which was down nearly 29% from the same period last year. Sales totaled $13.63 billion, an increase of approximately 10% from the previous year and above analyst expectations. Adjusted for one-time items, United Airlines’ fourth-quarter earnings were $2 per share, down from his $2.46 in the year-ago period.
Below is a comparison of United’s fourth-quarter report to Wall Street expectations, based on average estimates compiled by LSEG (formerly Refinitiv).
- Adjusted earnings per share: $2.00 versus expected $1.69
- Total income: $13.63 billion vs. expected $13.54 billion
United Airlines met its full-year adjusted earnings target of $10 to $12 per share, with full-year 2023 expected earnings of $10.05.
“Despite unpredictable headwinds, we achieved the ambitious EPS targets that most people thought possible and delivered customer “We have set a new flight record for this.”
The company touted strong travel demand late last year and solid bookings so far this year. For the full year 2024, United expects adjusted earnings per share to be between $9 and $11, within the range of analyst estimates.
United executives are holding an earnings call Tuesday at 10:30 a.m. ET and are likely to face questions about compensation from Boeing for the grounding. Alaska Airlines is scheduled to report before the market opens on Thursday, and Boeing is scheduled to report earnings on January 31st.
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