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By Rajesh Kumar Singh
CHICAGO, April 18 (Reuters) – United Airlines Holdings Inc UAL.O on Tuesday reported a smaller-than-expected loss in the first quarter, helped by higher capacity and lower than estimated operating expenses excluding fuel.
The Chicago-based carrier said it expects a profit of $3.50-$4 a share in the second quarter. That compares with analysts’ estimates of $3.65 a share, according to a Refinitiv survey.
The company also retained its full-year profit outlook.
Airlines are enjoying robust consumer demand in spite of growing risks of an economic recession. This has allowed them to mitigate rising labor and fuel bills with higher ticket prices.
Some analysts are not sure the travel boom will last for long.
United last month spooked investors with a profit warning, stoking worries about the industry’s pricing power. Those concerns were amplified last week when American Airlines Group Inc’s AAL.Orevised earnings forecast fell short of Wall Street estimates.
Delta Air Lines’ DAL.Nearnings report last week eased some of those concerns, yet a manufacturing problem with Boeing Co’s BA.N 737 MAX jets has cast a shadow on the industry’s plans to add more flights to capitalize on a busy summer travel season.
United is one of the most exposed carriers to Boeing’s delivery delays. The airline has yet to receive nearly three-fourths of its MAX jet order this year.
“The aggressive earnings forecast has been premised on additions of new aircraft to the company’s fleet,” said Peter McNally, an analyst at research firm Third Bridge. “This is entirely dependent on Boeing 737s.”
(Reporting by Rajesh Kumar Singh; Editing by David Gregorio)
((rajeshkumar.singh@thomsonreuters.com; +1-313-484-5370; Reuters Messaging: rajeshkumar.singh.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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