United Airlines Lowers Profit Forecast Amid Rising Fuel Costs
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy UAL?
Source: Newsfilter
- Profit Forecast Downgrade: United Airlines forecasts adjusted earnings of $1 to $2 per share for Q2, with a midpoint of $1.50 falling short of analysts' expectations of $2.08, indicating pressure on margins from rising fuel costs despite strong demand.
- Full-Year Profit Outlook: The airline projects full-year earnings between $7 and $11 per share, which is below the market expectation of $9.58, reflecting the adverse impact of soaring fuel prices on overall profitability.
- Fuel Cost Pressure: United anticipates fuel costs to reach approximately $4.30 per gallon in the current quarter based on the forward curve as of April 17, further intensifying operational cost pressures.
- Price Recovery Capability: The airline expects to recover only 40% to 50% of the fuel price increase through fares and other revenue measures in Q2, improving to 70% to 80% in Q3, and potentially reaching 85% to 100% by Q4.
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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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