What to Expect When United Reports After the Close

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United Airlines Holdings Inc. (NYSE: UAL) is scheduled to release its third-quarter financial results after the markets close on Tuesday. The consensus estimates from Thomson Reuters are $3.95 in earnings per share (EPS) and $11.42 billion in revenue. The same period of last year reportedly had $3.06 in EPS and $11.0 billion in revenue.

Last week, the company said that it was canceling all flights scheduled for Boeing Co. (NYSE: BA) 737 Max passenger jets until January 6, 2020, as regulators in the United States and elsewhere continue reviewing changes to the globally grounded aircraft’s software.

United said it would cancel more than 8,000 flights in October, November and December that had been scheduled for its fleet of 14 737 Max jets. The cancellations follow announcements by Southwest to cancel 737 Max flights through January 6 and American Airlines to cancel flights through January 15.

However, airline stocks got a boost Friday after low-cost carrier Spirit Airlines raised its guidance for third-quarter results. The carrier still expects revenue per available seat mile to be down, just by less than it had previously forecast. Operating costs excluding fuel also will be higher, but not by as much as a prior estimate had calculated. Fuel costs are expected to drop by nearly 12%, and available seat miles are expected to rise by 11.6%.

Excluding Tuesday’s move, United had underperformed the broad markets, with the stock down about 3.9% year to date. Over the past 52 weeks, the stock was down only about 8.6%.

A few analysts weighed in on the stock ahead of the earnings report:

  • Cowen has a Hold rating with a $96 price target.
  • Morgan Stanley has an Overweight rating and a $103 target.
  • Goldman Sachs has a Buy rating with a $128 target price.
  • JPMorgan has a Buy rating.
  • Berenberg has a Hold rating with a $95 target price.
  • Buckingham Research has a Buy rating and a $120 target.

Shares of United traded up about 1% at $87.72 on Tuesday, with a consensus price target of $109.94 and a 52-week trading range of $77.02 to $97.85.


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