United Airlines (UAL) shares moved firmly higher Wednesday after the carrier posted stronger-than-expected fourth quarter earnings and forecast Street-beating profits for the coming year.
United said adjusted earnings for the three months ending in December came in at $2.46 per share, well ahead of the $2.10 Street forecast, as revenues surged 51.4 from last year to $12.4 million and profit margins advanced to 11.2%.
Looking into the current financial year, United said it expects adjusted earnings to nearly quadruple, thanks in part to the ongoing travel boom and a tighter grip on expenses, to between $10 and $12 per share, nearly double the Refinitiv forecast of $6.54 per share, with revenue growth in the 'high teens'.
Travel numbers continue to expand in the U.S., with Transportation Security Administration data indicating checks of some 32.57 million passengers though from January 1 to January 16, a 30.3% increase from the same period last year and 4.2% higher than the pre-pandemic levels of 2019.
"Over the last three years, United has made critical investments in tools, infrastructure and our people – all of which are essential investments in our future," said CEO Scott Kirby. "That's why we've got a big head start, and we're now poised to accelerate in 2023 as our United Next strategy becomes a reality."
United Airlines shares were marked 0.75% higher in early Wednesday trading to indicate an opening bell price of $51.82 each, a move that would extend the stock's six-month gain to around 30%.
Last week, United's larger rival American Airlines (AAL) boosted its fourth quarter profit forecast, indicating it will post adjusted earnings that are more than double its prior estimate, amid the ongoing boost in domestic travel and the loosening of restrictions on U.S. passengers heading to China.
American will publish its official fourth quarter earnings on Thursday.
Delta Air Lines (DAL), the first of the major airlines to report December quarter profits last week, posted an adjusted bottom line of $1.48 per share on revenues of $12.3 billion, a near 30% increase from the same period last year, but cautioned that rising non-fuel costs, including recently-agreed 34% pay increases for pilots, would eat into its near-term profits.
Delta forecast first quarter earnings of between 15 cents and 40 cents per share, missing Street forecasts of around 55 cents, but said overall revenues would rise between 14% and 17% from 2019 levels.
