Airlines have been grounded lately, taking the struggle bus instead of flying high as many anticipated. That sentiment continued today as United Airlines provided a lackluster forecast. 😞
The airline reported third-quarter adjusted earnings per share of $3.65 on revenues of $14.5 billion. Both topped expectations of $3.38 and $14.4 billion.
However, executives warned that the Israel-Hamas war is expected to negatively impact fourth-quarter results. Currently, the company expects to earn $1.80 per share, but it could earn $1.50 if flights to Tel Aviv are suspended through the end of the year. Like its peers, it’s also facing higher fuel prices, forecasting a roughly 10% jump QoQ. ⚠️
That earnings estimate was well below the $2.09 per share Wall Street expected. It also caused their full-year forecast to come in well below estimates. 👎
Like other airlines, investors remain concerned that “peak” travel demand and prices are behind us. And with the industry’s biggest stocks failing to make new highs during this incredible run for their businesses, there’s not a lot of confidence their shares will rise during a slowdown.
As a result, $UAL shares were down about 5% after hours, stuck in the middle of the range they’ve settled into since the pandemic began. 😴
