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United Airlines (UAL) reported third-quarter earnings after the close Tuesday that beat estimates, saying it expected “record levels” of flying to locations abroad next summer as it tries to position itself for the reopening of global travel.
United Airlines stock and other airline stocks rose after hours. The company’s earnings conference call takes place on Wednesday.
Earnings from American Airlines (AAL) and Southwest Airlines (LUV) are due on Wednesday. Those results arrive as airline industry faces questions about rising fuel costs and its ability to attract and retain talent.
United lost $1.02 per share during the third quarter. That was better than the $1.58 expected, according to FactSet.
The carrier reported revenue of $7.8 billion, also topping forecasts for $7.64 billion. The company cited a rebound in upscale leisure travel, an uptick in business travel and eased restrictions in some markets across the Pacific.
United forecast fourth-quarter revenue down 25% to 30% compared to 2019. FactSet forecast a 24% drop from those levels, to $8.24 billion.
United said it expected fuel prices in that quarter to be around $2.39 per gallon.
United reported just days after the U.S. said it would remove restrictions for vaccinated travelers from abroad on Nov. 8. Cowen airlines stocks analyst Helane Becker said in a note earlier this month that United was her top pick for international exposure.
United also said it would increase its international flight capacity by 10% next year. And it said it expected “flying at record levels” next summer to Europe, Latin America, India, Africa and the Middle East.
United this month also said it was planning its largest domestic flight schedule since March of last year, when coronavirus restrictions in the U.S. first started. The airline said it was expanding its flight coverage to meet increasing holiday-travel demand.
Delta Air Lines (DAL) last week put up its first round of positive earnings per share in the pandemic era, on a rebound in travel demand. But it warned on rising fuel costs.
United Airlines stock gained 1.5% after hours in the stock market today. Shares have lost support at their 50-day line. The stock has a 34 Composite Rating and a 16 EPS Rating.
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Estimates: Wall Street expects Southwest to lose 27 cents per share. The Street expected revenue of $4.58 billion, up 156% from a year ago but down from 2019.
Results: Due Wednesday.
Southwest Airlines earlier this month had to cancel more than 2,000 flights. The airline attributed the issue to the effects of bad weather and “air traffic constraints” that hamstrung flights in Florida, where Southwest does a lot of business.
Those effects, it said, rippled through its network, leaving crew and jets stuck in places they weren’t supposed to be. Southwest’s pilots union, however, blamed the disruptions on poor management.
Both the company and the union said the cancellations weren’t a result of any employee actions, after speculation over resistance to Southwest’s recent vaccine mandate for staff.
Southwest stock rose 0.5% after hours on Tuesday. Like other airline stocks, Southwest’s ratings are weak. The stock has a 33 Composite Rating and a 19 EPS Rating.
Estimates: Wall Street expects American Airlines to lose $1.06 per share, with revenue up 179% from a year ago to $8.85 billion.
Results: Due Wednesday.
American Airlines stock rose 0.7% late Tuesday. The stock has a 39 Composite Rating and a 26 EPS Rating.
Airline stocks this summer were under pressure due to the rise of the delta variant of the coronavirus. Business travel has recovered more slowly than leisure travel, amid delays in office reopenings.
Cowen also noted that jet-fuel prices have spiked from last year and could increase more as the global economy recovers from the pandemic. Airlines will also likely have to pay more to attract and keep staff, following what Cowen called a “brain drain” on the industry after thousands of employees left it last year.
Still, the airlines are banking on a strong holiday season, after lockdowns last year kept many people at home.
“People might have been willing to give up one holiday season with loved ones, but they won’t give up two,” Becker wrote.
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