United Airlines Holdings Inc (NASDAQ:UAL) stock fell 8.67% (As on October 18, 11:16:54 AM UTC-4, Source: Google Finance) after the company reported third-quarter results that topped estimates, but Q4 guidance fell short of estimates as higher fuel costs and the suspension of Tel Aviv flights are expected to weigh. The average price per fuel was $2.95 per gallon, in line with United’s revised fuel price guidance range of $2.95 to $3.05 per gallon. It reported that its capacity was up 15.7% compared to the third quarter of 2022. The airline also noted that total revenue from its premium products, such as premium economy tickets, increased 20% over the year-ago quarter and accounted for more than half of all passenger revenue. However, the airline said higher fuel costs, estimated at $3.28 per gallon, and pausing its flights into Tel Aviv, Israel during the Israel-Hamas conflict will drag on its profits during the upcoming fourth quarter. . United experienced a strong and steady domestic demand environment in the quarter, with 9% revenue growth year-over-year, outpacing second quarter results. The company saw strength in close-in bookings in August and September with both months well ahead of year-over-year demand.
Moreover, in the international space, profits were at record highs in both the Atlantic and Pacific regions. Revenue in the Atlantic region was up 15% versus the same quarter in 2022, and 70% versus the same quarter in 2019. Pacific revenue exceeded third-quarter 2019 levels despite capacity remaining 24% below third-quarter 2019. Domestic revenues in the quarter were second highest all-time and the domestic system remains solidly profitable
UAL in the third quarter of FY 23 has reported the adjusted earnings per share of $3.65, beating the analysts’ estimates for the adjusted earnings per share of $3.41. The company had reported the adjusted revenue growth of 12.5 percent to $14.48 billion in the third quarter of FY 23, beating the analysts’ estimates for revenue of $14.43 billion.
Looking ahead, the company forecast Q4 EPS of $1.80 or $1.50, assuming suspension of Tel Aviv flights through year-end. That was below estimates of $2.13.
On the other hand, United continues to see the benefits of having an award winning airline loyalty program. The third quarter showed a continued multi-year new MileagePlus member trend, setting a record for third quarter enrollments and nearly doubling the number of new members versus the third quarter just five years ago.