United Airlines increased its revenue forecast slightly for the third quarter. The airline giant said it is coming off a "robust summer" and continues to see "strong demand" compared to before the Covid pandemic. UAL stock edged higher in trading.
The Chicago-based airline expects its total operating revenue to increase around 12% in Q3 2022 vs. Q3 2019, up from its prior target of 11% growth. United Airlines reported in a federal filing it has also improved operational reliability throughout the year.
As a result, the carrier now expects its capacity to be "trending higher" in Q3, down 10%-11% vs. Q3 2019 compared to a previous forecast of 11%.
United Airlines also increased its jet-fuel cost estimate to $3.83 in Q3, up from its previous forecast of $3.81. But other costs are expected to be in line or slightly better than original expectations. With increased capacity, it expects cost per available seat miles, excluding fuel, profit sharing and nonrecurring charges, to be up 16% vs. Q3 2019 vs. previous expectations of 16%-17%.
United Airlines Stock
UAL shares rose about 5.5% to 38.60 during Wednesday's market trading. United Airlines stock closed Tuesday up 3.6% trading at 36.58. The stock is below its 50-day moving average.
While United and other airlines, including Delta Air Lines and Spirit Airlines, have remained upbeat about demand some analysts have raised concerns about about price increases — including for airfares — and concerns about a recession. There are also concerns that post-Labor Day, airline demand may fall off after an unusually strong summer
In the second quarter, United earned $1.43 per share, up from a net loss of 3.91 in Q2 2021. Revenue ballooned 121% to $12.1 billion. Analysts forecast United Airlines earning $2.07 per share in the third quarter, up from a net loss of $1.02 in Q3 2021. Sales are expected to increase 63% to $12.6 billion.
If predictions hold true, it would be the the first time since Q4 2019 that the company had consecutive profitable quarters.
United Airlines stock has an 44 Composite Rating out of 99. It has a 46 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement. The rating shows how a stock's performance over the last 52 weeks holds up against all the other stocks in IBD's database. The EPS rating is 65.
Meanwhile, DAL stock rose a fraction before the open, along with American Airlines.
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