United Airlines' Stock Falls 6% On Lowered Guidance
Date
10/18/2023 10:13:00 AM
(MENAFN- Baystreet)
United Airlines' Stock Falls 6% On Lowered Guidance
United airlines (UAL) has reported third-quarter financial results that beat Wall Street forecasts. However, the stock is down 6% after the company lowered its forward guidance.
United announced Q3 earnings per share (EPS) of $3.65 U.S. versus $3.35 U.S. that had been expected among analysts.
Revenue for the latest quarter came in at $14.48 billion U.S. compared to $14.44 billion U.S. that had been anticipated. The company's revenue rose 12% from $12.88 billion a year earlier.
Despite the earnings beat, United's stock is down more than 5% after the carrier warned that more expensive jet fuel and a halt to its Tel Aviv flights due to the Israel-Hamas war will negatively impact its profits in the current fourth quarter of the year.
The company said that it is grappling with jet fuel prices that are up nearly 25% since the start of the summer.
Additionally, United and other U.S. carriers have halted their flights to Israel as war erupts in the Middle East.
United had more service to Israel than any other U.S.-based airlines with direct service from Washington, D.C.; Newark, New Jersey; and San Francisco, California.
The Chicago-based airline said it now expects EPS of between $1.50 U.S. and $1.80 U.S. per share for Q4, which is below Wall Street forecasts of $2.06 U.S.
United said it expects that its Q4 revenue will rise year-over-year between 9% and 10.5%. Its costs, excluding fuel, will likely rise between 3.5% and 5% in Q4 from 2022 levels.
The lowered guidance comes after a strong summer travel season with revenue growth for international destinations outpacing sales of domestic tickets in the U.S.
United Airlines' stock has risen 8% over the last 12 months and trades at $40.12 U.S. per share.
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