U.S. markets open in 7 hours 49 minutes
  • S&P Futures

    4,345.25
    +27.50 (+0.64%)
     
  • Dow Futures

    34,202.00
    +159.00 (+0.47%)
     
  • Nasdaq Futures

    14,150.50
    +163.75 (+1.17%)
     
  • Russell 2000 Futures

    1,934.10
    +5.80 (+0.30%)
     
  • Crude Oil

    87.19
    +0.58 (+0.67%)
     
  • Gold

    1,795.70
    +2.60 (+0.14%)
     
  • Silver

    22.75
    +0.07 (+0.30%)
     
  • EUR/USD

    1.1157
    +0.0010 (+0.09%)
     
  • 10-Yr Bond

    1.8070
    0.0000 (0.00%)
     
  • Vix

    30.49
    -1.47 (-4.60%)
     
  • GBP/USD

    1.3413
    +0.0032 (+0.24%)
     
  • USD/JPY

    115.3790
    +0.0770 (+0.07%)
     
  • BTC-USD

    37,411.08
    +1,388.55 (+3.85%)
     
  • CMC Crypto 200

    849.52
    +30.02 (+3.66%)
     
  • FTSE 100

    7,554.31
    +84.53 (+1.13%)
     
  • Nikkei 225

    26,717.34
    +547.04 (+2.09%)
     

What's in Store for United Airlines (UAL) in Q3 Earnings?

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • UAL
  • CHRW
  • LSTR

United Airlines UAL is scheduled to report third-quarter 2021 earnings numbers on Oct 19, after market close.

Amid the coronavirus-induced suppressed air travel demand, the company incurred loss in six consecutive quarters. The Zacks Consensus Estimate for third-quarter loss has widened by more than 100% over the past 60 days.

Let’s see how things are shaping up for this earnings season.

Factors to Note

Continued improvement in air travel demand is expected to be reflected in United Airlines’ passenger revenues in the third quarter. The Zacks Consensus Estimate for passenger revenues indicates a 55.2% jump from the second quarter’s reported figure.

The airline’s cost-control measures are likely to have lowered unit costs, which, in turn, should get reflected in the bottom line. The Zacks Consensus Estimate for consolidated unit cost or cost per available seat mile, excluding fuel, third-party business expenses, profit-sharing and special charges suggests a 17% decline from the previous quarter’s reported figure.

However, the company’s bottom line might have been partly hurt by rising fuel costs, due to an increase in oil prices. The carrier estimates fuel cost per gallon of approximately $2.17 for the third quarter, higher than $1.97 reported in the second quarter. The Zacks Consensus Estimate for fuel price per gallon shows an 8.1% increase from the second quarter’s reported number.

Despite the improvement, air travel demand remains below the pre-pandemic (2019) levels. As a result, management expects total revenues for the third quarter to plunge approximately 33% from the comparable period in 2019. In response to the low-demand scenario, the carrier has reduced its capacity. It expects the September-quarter capacity to be down at least 28% from third-quarter 2019.

Moreover, United Airlines expects softness in bookings, induced by the Delta variant-led spike in coronavirus cases, to dampen its upcoming results. Management expects the carrier to post an adjusted pretax loss for the period.

United Airlines Holdings Inc Price and EPS Surprise

United Airlines Holdings Inc Price and EPS Surprise
United Airlines Holdings Inc Price and EPS Surprise

United Airlines Holdings Inc price-eps-surprise | United Airlines Holdings Inc Quote

Earnings Whispers

The proven Zacks 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. However, this is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: United Airlines has an Earnings ESP of -12.34% as the Most Accurate Estimate is pegged at a loss of $1.67, wider than the Zacks Consensus Estimate of a loss of $1.49. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: United Airlines carries a Zacks Rank #3.

Highlights of Q2 Earnings

In the last reported quarter, the company delivered an earnings surprise of 6.2% with a loss of $3.91 per share. The Zacks Consensus Estimate was pegged at a loss of $4.17. Operating revenues also surpassed the Zacks Consensus Estimate and surged more than 100% year over year owing to 541.1% increase in passenger revenues.

Stocks to Consider

Investors interested in the broader Transportation sector may consider C.H. Robinson Worldwide CHRW, Knight-Swift Transportation Holdings KNX and Landstar System LSTR, as these stocks possess the right combination of elements to beat on earnings this reporting cycle.

C.H. Robinson has an Earnings ESP of +2.03% and a Zacks Rank #3. The company will report third-quarter results on Oct 26.

Knight-Swift has an Earnings ESP of +0.77% and a Zacks Rank #3. The company is scheduled to report third-quarter earnings numbers on Oct 20.

Landstar System has an Earnings ESP of +4.13% and a Zacks Rank #2. The company is slated to release third-quarter financial numbers on Oct 20.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

United Airlines Holdings Inc (UAL) : Free Stock Analysis Report

C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report

KnightSwift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report

Landstar System, Inc. (LSTR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research