United Airlines plans $1.5 billion share buyback, forecasts fourth-quarter earnings above estimates

United Airlines plans .5 billion share buyback, forecasts fourth-quarter earnings above estimates


A United Airlines Boeing 737-MAX 8 aircraft departs at San Diego International Airport en route to New York on Aug. 24, 2024.

Kevin Carter | Getty Images

United Airlines said Tuesday that it is starting a $1.5 billion share buyback as the carrier reported higher-than-expected earnings for the busy summer travel season and forecast strong results for the last three months of the year.

United expects to earn an adjusted $2.50 to $3.00 a share in the fourth quarter, compared to $2.00 a share a year earlier and the $2.68 analysts polled by LSEG estimated.

Here is what United reported for the third quarter compared with what Wall Street expected, based on average estimates compiled by LSEG:

  • Earnings per share: $3.33 adjusted vs. $3.17 expected
  • Revenue: $14.84 billion vs. $14.78 billion expected

The share buyback would be United’s first since before the Covid-19 pandemic. U.S. airlines received more than $50 billion in government aid during the pandemic travel slump that prohibited share repurchases and dividends, though airlines were still fighting for financial stability.

Southwest Airlines announced a $2.5 billion share repurchase program last month.

“Like other leading airlines and companies, we are initiating a measured, strategic share repurchase program,” United CEO Scott Kirby said in a note to staff on Tuesday. “Importantly, my commitment to you is that investing in our people and our business will always be my top priority even while we institute this share repurchase program.”

Read more CNBC airline news

For the third quarter, United posted revenue of $14.84 billion, up 2.5% from a year earlier and above analysts’ estimates. It reported net income of $965 million, down 15% from a year ago.

United said domestic unit revenue was positive in August and September compared to last year as airlines trimmed a glut of flights that were pushing down fares. United expanded capacity by 4.1% in the third quarter. The carrier said corporate revenue rose 13% in the quarter; premium revenue, including business class tickets, rose 5%; and sales from its no-frills basic economy tickets were up 20%.

The airline last week unveiled a far-flung expansion for next year that included new flights to Mongolia, Senegal, Spain and Greenland in a chase for international travel demand.

Adjusting for one-time items, United reported earnings per share of $3.33, topping Wall Street forecasts and United’s estimate in July of $2.75 to $3.25 a share.

Airline executives will hold a call with analysts at 10:30 a.m. ET on Wednesday and will likely face questions about demand for the end of the year and into 2025, as well as production problems at Boeing, where most factories have been idled during a more than monthlong machinist strike.

Don’t miss these insights from CNBC PRO



Source

3-Stock Lunch: Palantir, Lyft and Expedia
Travel

3-Stock Lunch: Palantir, Lyft and Expedia

Will McGough, Prime Capital Financial director of investments, joins ‘Power Lunch’ to discuss stock plays for three stocks. Source

Read More
The keyword for American’s summer travel is local, local, local, says ResortPass CEO Michael Wolf
Travel

The keyword for American’s summer travel is local, local, local, says ResortPass CEO Michael Wolf

ShareShare Article via FacebookShare Article via TwitterShare Article via LinkedInShare Article via Email Power Lunch Michael Wolf, Resort Pass CEO, joins ‘Power Lunch’ to discuss state of the consumer spending and summer travel trends he’s seeing. 04:54 2 hours ago Source

Read More
FAA: Outage at Newark Airport’s radar screens Friday morning lasted 90 seconds
Travel

FAA: Outage at Newark Airport’s radar screens Friday morning lasted 90 seconds

CNBC’s Phil LeBeau reports on news regarding Newark Liberty International Airport. Source

Read More