A United Airlines plane at Denver International Airport.
Leslie Josephs | CNBC
United AirlinesThe company’s second-quarter profit rose more than 20% from a year ago as strong demand for international travel boosted its business, but an oversupply of flights weighed on fares and the company’s third-quarter outlook fell short of expectations.
United Airlines said on Wednesday it expects adjusted earnings of $2.75 to $3.25 a share for the current quarter, below the $3.44 a share expected by analysts surveyed by LSEG.
Here’s how United’s second-quarter report compared to Wall Street expectations, based on the average forecast compiled by LSEG:
- Earnings per share: Adjusted earnings: $4.14 (expected: $3.93)
- Revenue: $14.99 $15.06 billion (estimated)
United Airlines earned $1.32 billion, or $3.96 a share, for the three months ended June 30, up from $1.08 billion, or $3.24 a share, a year earlier. Adjusting for one-time items, earnings were $4.14 a share, beating analysts’ expectations of $3.93.
Revenue was $14.99 billion, up 5.7% from the same period last year but slightly below expectations.
United Airlines reiterated its full-year guidance for adjusted earnings of $9 to $11 per share.
United and Delta AirlinesDespite disappointing third-quarter guidance, Air Canada remains a standout player in the U.S. airline industry. Despite record demand, most airlines are struggling to add capacity for domestic flights, weighing on airfares.
Both airlines have begun flying international routes, which have seen increased demand since the pandemic, and are offering premium services such as larger lounges and wider seats to capture demand from travelers who are willing to pay more for tickets.
United Airlines said Wednesday that premium revenue was up more than 8% from last year and sales of its most restrictive basic economy tickets were up 38% as the airline strives to cater to both ends of the market.
The airline grew its domestic fleet by more than 5% in the second quarter compared to the same period a year ago, but unit revenues fell by more than 1% compared to the same period a year ago. Revenues from flights to and from Europe, which account for a smaller portion of United’s revenues, rose by more than 5% compared to the second quarter of 2023.
United Airlines CEO Scott Kirby said airlines are cutting schedules and will see a tipping point in mid-August to ease capacity.
“Looking forward, we expect our unit revenue to be the highest among major airlines in the second half of the third quarter as multiple airlines begin to cancel loss-making capacity,” he said.
on tuesday, Spirit Airlines The company lowered its second-quarter earnings forecast, citing lower-than-expected revenue from fees for seats, baggage and other items. Southwest Airlines and American AirlinesThe company, which reports earnings on July 25, previously revised down its second-quarter forecast.
