United Airlines says pricier fuel, war in Middle East will weigh on profits

United Airlines says pricier fuel, war in Middle East will weigh on profits


A Boeing 787-10 Dreamliner, from United Airlines, taking off from Barcelona airport in Barcelona on March 28, 2023.

JanValls | Nurphoto | Getty Images

United Airlines said more expensive jet fuel and a halt to the carrier’s Tel Aviv flights during the Israel-Hamas war will eat into its profits in the last three months of the year.

For the current quarter, the Chicago-based carrier estimated adjusted earnings of between $1.50 and $1.80 a share, below analysts’ forecasts of $2.06.

United would then earn between $9.55 and $9.85 a share, on an adjusted basis, down from its forecast in July of between $11 and $12 a share, based on its projection for the fourth quarter. Jet fuel prices in major U.S. airports are up nearly 25% since the start of summer.

Its shares dropped around 4% in after-hours trading.

United and other U.S. and international carriers halted their flights to Israel earlier this month. United had more service to Israel than any of the U.S.-based airlines with service from Washington, D.C.; Newark, New Jersey; and San Francisco.

United said its fourth-quarter revenue will rise year over year between 9%, if Israel flights remain suspended through the end of the year, and 10.5% if the suspension lasts only through October. Its costs, excluding fuel, will likely rise between 3.5% and 5% in the fourth quarter from 2022, United said.

The service suspension comes after a robust summer for air travel with revenue growth for international destinations outpacing sales of domestic tickets. That has put big, global carriers such as United and Delta on better footing than some discount airlines such as Spirit, which focus more on U.S. cities and expect losses.

Here’s what United reported for the third quarter compared with what Wall Street expected, based on average estimates compiled by LSEG, formerly known as Refinitiv:

  • Adjusted earnings per share: $3.65 vs. an expected $3.35
  • Total revenue: $14.48 billion vs. an expected $14.44 billion

United posted third-quarter net income of $1.14 billion, or $3.42 a share, versus $942 million, or $2.86 a share, a year earlier. Adjusting for one-time items, United posted earnings per share of $3.65.

Revenue rose to $14.48 billion from $12.88 billion.

The carrier will hold a call with analysts and media on Wednesday at 10:30 a.m. ET, when it will face questions on fourth-quarter demand and how the carrier plans to tamp down rising costs.



Source

Here are the retailers raising prices as Trump tariffs take hold
Business

Here are the retailers raising prices as Trump tariffs take hold

A person picks out clothing in a store as retailers compete to attract shoppers and try to maintain margins on Black Friday, one of the busiest shopping days of the year, at Woodbury Common Premium Outlets in Central Valley, New York, U.S. November 24, 2023.  Vincent Alban | Reuters Consumers who hoped tariffs would not […]

Read More
This is why Jamie Dimon is so gloomy on the economy
Business

This is why Jamie Dimon is so gloomy on the economy

Jamie Dimon, CEO of JPMorgan Chase, testifies during the Senate Banking, Housing and Urban Affairs Committee hearing titled Annual Oversight of Wall Street Firms, in the Hart Building on Dec. 6, 2023. Tom Williams | Cq-roll Call, Inc. | Getty Images The more Jamie Dimon worries, the better his bank seems to do. As JPMorgan […]

Read More
Summer rentals in the Hamptons are down 30%
Business

Summer rentals in the Hamptons are down 30%

Key Points Summer rentals in the Hamptons are down 30% from the same period in previous years, according to Judi Desiderio of William Raveis Real Estate. Brokers who focus on ultra-high-end rentals are seeing an even bigger drop and say their rental business is down between 50% and 75%. Some renters may be holding out […]

Read More