Yahoo Finance United Airlines (UAL) Tops Q4 Earnings, Revenues Rise Y/Y
United Airlines Holdings, Inc. UAL reported better-than-expected fourth-quarter 2022 results, wherein earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of $2.46 per share beat the Zacks Consensus Estimate of $2.07. In the year-ago quarter, UAL incurred a loss of $1.60 per share when air-travel demand was not as buoyant as in the current scenario. The fourth quarter of 2022 was the third consecutive profitable quarter at UAL since the onset of the pandemic.
Operating revenues of $12,400 million beat the Zacks Consensus Estimate of $12,230 million. UAL’s revenues increased 51.37% year over year owing to upbeat air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.9% from fourth-quarter 2019 (pre-coronavirus) levels.
The massive year-over-year increase in the top line was driven by 62.9% rise in passenger revenues (accounting for 90.3% of the top line) to $11,202 million. Moreover, passenger revenues increased 12.8% from fourth-quarter 2019 reading. Nearly 39 million passengers traveled on UAL flights in the December quarter.
Cargo revenues skyrocketed 49.4% from fourth-quarter 2019 actuals to $472 million. Revenues from other sources increased 13.6% from the fourth quarter of 2019 to $726 million.
United Airlines Holdings Inc Price, Consensus and EPS Surprise
United Airlines Holdings Inc price-consensus-eps-surprise-chart | United Airlines Holdings Inc Quote
Other Details of Q4
Below, we present all comparisons (in % terms) with fourth-quarter 2019 figures unless otherwise stated.
Consolidated passenger revenue per available seat mile (a key measure of unit revenues) increased 24.6%. Total revenue per available seat mile (TRASM) rose 25.8% to 19.29 cents. The average yield per revenue passenger mile was up 20.8% to 20.46 cents.
Consolidated airline traffic, measured in revenue passenger miles, dropped 6.6%, while capacity, measured in available seat miles, fell 9.5%. Consolidated load factor (percentage of seat occupancy) inched up 2.7 percentage points to 85.2%.
The average aircraft fuel price per gallon jumped 68.6% to $3.54. Fuel gallons consumed were down 12.6% from fourth-quarter 2019 actuals.
Adjusted operating expenses increased 0.7% to $7,529 million. Operating expenses (on a reported basis) increased 9.9% to $11,023 million. Consolidated unit cost or cost per available seat mile (CASM), excluding fuel, third-party business expenses, profit-sharing and special charges, ascended 11.2% to 11.71 cents.
United Airlines, currently carrying a Zacks Rank #2 (Buy), exited the fourth quarter with cash and cash equivalents of $7,166 million compared with $11,258 million at the end of the prior quarter. Long-term debt at the end of the reported quarter was $28,283 million compared with $28,490 million at the end of the prior quarter.
Outlook
For the first quarter of 2023, United Airlines expects capacity to improve by around 20% from the year-ago reported figure. TRASM is anticipated to grow almost 25% year over year. CASM, excluding fuel, third-party business expenses, profit-sharing and special charges, is expected to decline in the range of 3-4%.
Total revenues are anticipated to grow almost 50% year over year. UAL expects first-quarter earnings per share in the $0.5-$1.00 band. The Zacks Consensus Estimate for first-quarter earnings is currently pegged at 10 cents.
UAL forecasts the average aircraft fuel price per gallon to be $3.19 in the first quarter.
For 2023, United Airlines expects capacity to stay in the high teens. TRASM is anticipated to remain flat. CASM, excluding fuel, third-party business expenses, profit-sharing and special charges, is expected to remain flat.
Total revenues are anticipated to stay in the high teens. UAL expects 2023 earnings per share in the $10-$12 band. The Zacks Consensus Estimate for 2023 earnings is currently pegged at 46.92.
UAL forecasts the average aircraft fuel price per gallon in the $2.85-$2.90 band for 2023. The adjusted pre-tax margin is expected to be 9%. Adjusted capital expenditures are expected to be around $8.5 billion.
Other Stocks to Consider
Some other top-ranked stocks from the broader Zacks Transportation sector are American Airlines (AAL), Teekay Tankers Ltd. (TNK) and Gol Linhas Aereas Inteligentes S.A.GOL. Teekay Tankers presently sports a Zacks Rank #1(Strong Buy), while American Airlines andGol Linhas currently carry a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.
AAL has an expected earnings growth rate of more than 100% for the current year. AAL delivered a trailing four-quarter earnings surprise of 8.62%, on average.
The Zacks Consensus Estimate for AAL’s current-year earnings has improved 19.3% over the past 90 days. Shares of AAL have gained 17% over the past six months.
Teekay Tankers has an expected earnings growth rate of 143.11% for the current year. TNK delivered a trailing four-quarter earnings surprise of 42.23%, on average. Teekay Tankers has a long-term expected growth rate of 3%.
The Zacks Consensus Estimate for TNK’s current-year earnings has improved more than 100% over the past 90 days. Shares of TNK have soared 58.9% over the past six months.
Gol Linhas has an expected earnings growth rate of 50.9% for the current year.
Shares of GOL have gained 4.3% over the past six months.
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