United Airlines (UAL) Q3 2024 Earnings

United Airlines Tuesday said it is starting a $1.5 billion stock buyback program as the carrier reported stronger-than-expected earnings for the busy summer cruise season and forecast strong results. in 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 with $2.00 a share a year earlier and analysts polled by LSEG estimated is 2.68 USD.

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

• Earnings per share: $3.33 revised versus $3.17 expected
• Revenue: $14.84 billion compared to expected 14.78 billion USD

The share buyback would be United’s first since before the Covid-19 pandemic. US airlines received more than $50 billion in government aid during the pandemic travel downturn that banned stock buybacks and dividends, though airlines are still fighting for financial stability.

Southwest Airlines announced one Share repurchase program worth $2.5 billion last month.

“Like other leading airlines and companies, we are initiating a strategic share repurchase program,” United CEO Scott Kirby said in a memo to employees Tuesday. and calculated”. “Importantly, my commitment to you that investing in our people and our business will remain my top priority even as we undertake this share repurchase program.”

In the third quarter, United posted revenue of $14.84 billion, up 2.5% year-over-year and above analyst estimates. It reported net income of $965 million, down 15% from a year ago.

United said domestic revenue in August and September was positive compared with last year as airlines cut the number of flights, causing ticket prices to fall. United expanded capacity by 4.1% in the third quarter. The carrier said corporate revenue increased 13% in the quarter; Insurance premium revenue, including business class tickets, increased 5%; and no-frills basic economy ticket sales were up 20%.

The airline last week announced one distant expansion for next year, including new flights to Mongolia, Senegal, Spain and Greenland to meet international travel demand.

Adjusted for one-time items, United reported earnings per share of $3.33, above Wall Street forecasts and United’s July estimate of $2.75 to $3.25. USD per share.

Airline executives will hold a call with analysts at 10:30 a.m. ET on Wednesday and will likely face questions about demand later in the year and into 2025, as well as production issues at Boeingwhere most of the factories have not been operating for more than a while months-long machinists’ strike.

United’s flight attendant union, which has yet to reach a new labor agreement with the company, has criticized the airline’s decision to continue buying back shares.

In a statement, Sara Nelson, president of the Association of Flight Attendants-CWA, which represents cabin crew at United, Spirit, Alaska and other airlines, said: “The money that United just promised the City Wall belongs to the flight attendants who have worked throughout the pandemic and during this tax recovery for all of us on the front lines.”