United Airlines Lowers FY25 Profit Outlook Amid Fuel Costs
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy UAL?
Source: seekingalpha
- Profit Outlook Downgrade: United Airlines has lowered its FY25 adjusted EPS guidance from $12-$14 to $7-$11, reflecting a cautious stance on future capacity growth, particularly with expectations of flat to 2% growth in Q3 and Q4.
- Cost Pressure: Despite a 5.9% increase in cost per available seat mile (CASM-ex) in Q1, United's profit rose 31% year-over-year, indicating strong passenger revenue; however, high fuel prices continue to pressure profitability.
- Strategic Capacity Cuts: The company plans to address high fuel costs by cutting unprofitable routes and focusing capacity adjustments at Chicago O'Hare, expecting to fully recapture higher fuel costs by Q4, aiming to protect margins and cash flow.
- Fare Increases Mitigate Impact: United has raised fares five times in Q1, particularly on international flights, which are significantly covering the rising fuel costs, with management noting that higher fuel prices will lead to sustained fare increases.
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Analyst Views on UAL
Wall Street analysts forecast UAL stock price to rise
16 Analyst Rating
15 Buy
1 Hold
0 Sell
Strong Buy
Current: 91.250
Low
115.00
Averages
139.07
High
156.00
Current: 91.250
Low
115.00
Averages
139.07
High
156.00
About UAL
United Airlines Holdings, Inc. is a holding company. The Company transports people and cargo throughout North America and to destinations in Asia, Europe, Africa, the Pacific, the Middle East and Latin America. The Company, through United Airlines, Inc., and its regional carriers, operates across over six continents, with hubs at Chicago O'Hare International Airport (ORD), Denver International Airport (DEN), George Bush Intercontinental Airport (IAH), Los Angeles International Airport (LAX), Newark Liberty International Airport (EWR), San Francisco International Airport (SFO), Washington Dulles International Airport (IAD) and A.B. Won Pat International Airport (GUM). Its hub and spoke system allow it to transport passengers between a large number of destinations with frequent services. The Company has contractual relationships with various regional carriers to provide regional aircraft service branded as United Express. It provides freight and mail transportation services (Air Cargo).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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