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    Home»Business»United reports record earnings and forecasts robust summer quarter profits.

    United reports record earnings and forecasts robust summer quarter profits.

    EmilyeBy EmilyeJuly 20, 2023No Comments3 Mins Read
    United reports record earnings and forecasts robust summer quarter profits.

    United reports record earnings and forecasts robust summer quarter profits. United Airlines posted record quarterly earnings on Wednesday and projected a robust third quarter due to an unrelenting travel boom driven by the return of international travel.

    As a result of flight disruptions at its Newark, New Jersey, center, the airline’s capacity decreased during the second quarter. However, the company’s quarterly results and projections exceeded analyst expectations due to robust demand.

    During Thursday morning trading, shares increased by more than 4 percent, while other airline stocks declined.

    Read more: TSLA-Enhanced Rally Ignores Sellers While Cybertruck Takes Centre Stage

    United is the second U.S. airline to disclose quarterly results, echoing Delta Air Lines’ optimistic outlook for travel demand. American Airlines reported earnings Thursday morning before the market opened.

    After years of pandemic decline, United and other airlines have expanded their international service to capitalize on robust bookings. Global flight revenue accounted for approximately 40% of the airline’s total sales but is increasing faster than domestic sales.

    Here is what United reported for the second quarter compared to what Wall Street anticipated, based on the average of Refinitiv’s estimates:

    Adjusted earnings per share: $5.03 versus $4.03 expected. $14.18 billion in total revenue versus the expected $13.91 billion.  United reported a net income of $1.08 billion, or $3.24 per share, compared to $329 million, or $1 per share, for the same period in the previous year. The company earned $1.67 billion, or $5.03 per share, after adjusting for items such as a pilot incentive in a new preliminary labor agreement.

    United’s net income was boosted by a 26% decrease in petroleum costs.

    Meanwhile, revenue per available seat mile fell 0.4% compared to the previous year. The total revenue of $14.18 billion represented a 17% increase from the prior year.

    United’s capacity increased by 17.5% from the second quarter of 2022, one percentage point below what the airline intended to fly before the Newark delays.

    Scott Kirby, the chief executive officer of United, stated earlier this month that the company would have to curtail flights at Newark Liberty International Airport. A series of early-summer cyclones disrupted United’s operations at the airport, displacing tens of thousands of passengers and crew members.

    “The United team persevered through an unprecedented series of events at the end of last month,” Kirby stated in a Wednesday earnings release. “They are the best in the industry, and we’re concentrating on the changes we can make to serve our customers in Newark better.”

    Kirby stated earlier this month that the airline would have to reduce the number of flights at the gateway, which serves the New York City metropolitan area, to prevent flight delays at the congested airport.

    United anticipates a 16% increase in capacity for the three months ending September 30, compared to the same period last year, and a 13% increase in revenue for the same period in 2022. According to Refinitiv, United expects to report adjusted earnings per share between $3.85 and $4.35 for the third quarter, well above analysts’ estimates of $3.70 per share.

    After years of negotiations, United and its pilots’ union announced separately over the weekend that they had reached a preliminary labor agreement that would grant pilots raises of up to 40% over four years.

    The union estimates the value of the contract at $10 billion. It still needs to be ratified by United’s 16,000 pilots, but if they do, it could end years of negotiations as United seeks to increase its pilot ranks in response to a shortage of aviators.

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    Emilye

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