What's in the Offing for United Airlines (UAL) in Q3 Earnings?
United Airlines (UAL) is scheduled to report third-quarter 2023 results on Oct 17, after market close.
UAL has a solid earnings surprise history, having outperformed the Zacks Consensus Estimate in all of the preceding four quarters, the average beat being 21.4%.
Let’s see how things are shaping up for United Airlines this earnings season.
Q3 Expectations
The Zacks Consensus Estimate for revenues is pegged at $14.4 billion, indicating 12.1% growth year over year. The top line is likely to have been aided by a solid recovery in air-travel demand (post the pandemic-led slump). Per our estimate, total passenger revenues are likely to increase 14.3% in third-quarter 2023 from third-quarter 2022 actuals.
UAL expects revenues for the September quarter to grow 10-13% year over year. Capacity is anticipated to improve 16% from the year-ago reported figure.
Driven by the rosy air-travel-demand scenario, UAL projects quarterly earnings per share in the $3.85-$4.35 band. The Zacks Consensus Estimate is pegged at $3.39. Management has lifted its EPS forecast for 2023 and now expects the metric in the range of $11-12 (prior view: $10-$12).
United Airlines Holdings Inc Price and EPS Surprise
United Airlines Holdings Inc price-eps-surprise | United Airlines Holdings Inc Quote
On the flip side, high fuel costs per gallon are likely to have hurt the bottom line in the to-be-reported quarter. The fuel price has come down from the highs witnessed earlier, yet it remains at an elevated level. UAL now expects fuel cost per gallon in the $2.95 -$3.05 band (earlier guidance was in the $2.50 - $2.80 range). Our estimate is currently pegged at 3.01.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for United Airlines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is absolutely not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
United Airlines has an Earnings ESP of 0.00% and a Zacks Rank #3.
Highlights of Q2
UAL reported second-quarter 2023 earnings per share of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues jumped 17.1% year over year due to upbeat air-travel demand.
Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on their third-quarter 2023 earnings.
Old Dominion Freight Line ODFL has an Earnings ESP of +0.87% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
ODFL is scheduled to report third-quarter 2023 earnings on Oct 25. The Zacks Consensus Estimate for earnings has been revised 2.91% upward over the last 60 days. ODFL has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the preceding four quarters (missing the mark on the other occasion), the average beat being 3.86%.
Kirby Corporation KEX has an Earnings ESP of +6.52% and a Zacks Rank #2. KEX is slated to report third-quarter 2023 earnings on Oct 26.
The Zacks Consensus Estimate for third-quarter 2023 earnings has remained flat over the last seven days. KEX has a stellar earnings surprise history, having outshined the Zacks Consensus Estimate in each of the preceding four quarters by an average of 8.03%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
Old Dominion Freight Line, Inc. (ODFL) : Free Stock Analysis Report
Kirby Corporation (KEX) : Free Stock Analysis Report
