United Airlines surpassed estimates
United Airlines (UAL) stock gained over 3% in after-hours trading on April 16 after the company released strong first-quarter results. Its adjusted EPS doubled from the year-ago quarter and surpassed Wall Street analysts’ estimates as well.
Ready to put your morning scrolling to use? Sign up for Bagels & Stox, our witty take on the top market and investment news straight to your inbox! Whether you’re a serious investor or just want to be informed, Bagels & Stox will be your favorite email.
The company’s first-quarter adjusted EPS of $1.15 surpassed Wall Street analysts’ consensus estimate of $0.95 and marked YoY growth of 130%. With the latest upbeat bottom-line performance, the company has surpassed analysts’ earnings estimates in 12 of the last 13 quarters with an average surprise of 6.8%.
Strong revenue growth, lower fuel costs, and efficient cost management mainly drove United Airlines’ first-quarter earnings. The airline’s first-quarter revenues increased 6.2% YoY to $9.59 billion, almost in line with analysts’ expectations of $9.61 billion.
Robust growth in non-ticket sources along with an increase in the unit revenue mainly drove the company’s first-quarter revenue higher. The airline’s unit revenue for the quarter rose 1.1% due to strong travel demand. Notably, the company reported a strong top and bottom-line performance despite the negative impact from the partial government shutdown in January and the grounding of its 14 Boeing 737 Max jets since mid-March.
United Airlines’ ex-fuel CASM (cost per available seat mile) fell 1.8% mainly due to its fleet transformation initiatives and cost-control measures. Increased revenues and lower costs helped the company’s adjusted pre-tax margin expand by 210 basis points to 4.1% during the quarter from 2% in the same quarter the previous year.
Furthermore, United Airlines’ bottom-line results also benefited from a 2.8% fall in average aircraft fuel price per gallon. Notably, WTI oil prices have traded in the range of $50–60 per barrel during the first quarter of 2019, down from the $60–70 per barrel it traded at during the same quarter of the previous year.