Is United Airlines Stock Finally Ready to Take Off?

January 22, 2020 by Chris Lange

United Airlines Holdings Inc. (NASDAQ: UAL) released fourth-quarter financial results after markets closed Tuesday. The airline said that it had $2.67 in earnings per share (EPS) and $10.89 billion in revenue, compared with consensus estimates that called for $2.65 in EPS and $10.88 billion in revenue. The same period of last year reportedly had $2.41 in EPS and $10.49 billion in revenue.

Consolidated fourth-quarter passenger revenue per available seat mile increased 0.8% year over year. At the same time, the consolidated fourth-quarter unit cost per available seat mile decreased by 1.3%.

In terms of its segments, United reported as follows:

  • Passenger revenue increased by 3.9% to $9.93 billion.
  • Cargo revenue decreased 5.4% to $316 million.
  • Other operating revenues increased 6.3% to $639 million.

United issued no guidance in the release but said that it would discuss the outlook on the conference call Wednesday morning. Consensus estimates are calling for $4.60 in EPS and $11.93 billion in revenue for the first quarter.

Oscar Munoz, CEO of United Airlines, commented:

2019 was a great year for our United team — highlighted by achieving our $11 to $13 adjusted EPS target a full year ahead of schedule. With a four-quarter streak of expanding profit margins, when all the results are in we expect our full year 2019 pre-tax margin growth to be the highest amongst our largest competitors. When I look at United’s fundamental strength, I could not be prouder of what we’ve accomplished in such a short time. This is the New United we set out to build more than four years ago. As we embark on a new year and decade, I believe the outlook for United’s future has never been brighter.

Shares of United Airlines closed Tuesday at $85.79, in a 52-week range of $77.02 to $96.03. The consensus price target is $111.06. Following the announcement, the stock was up 1% at $86.64 in early trading indications Wednesday.

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