United Airlines (UAL) 3Q 2023 Earnings

A United Airlines Boeing 787-10 Dreamliner takes off from Barcelona Airport on March 28, 2023 in Barcelona.

Janwalls | NoorPhoto | Good pictures

United Airlines said more expensive jet fuel during the Israel-Hamas war and the carrier’s grounding of flights to Tel Aviv ate into its profits in the last three months of the year.

For the current quarter, the Chicago-based carrier reported adjusted earnings of $1.50 to $1.80 per share, compared to analysts’ estimates of $2.06.

United will then earn between $9.55 and $9.85 a share, on an adjusted basis. forecast Based on its forecast for the fourth quarter in July of $11 to $12 a share. Jet fuel prices at major US airports have risen nearly 25% since the start of the summer.

Its shares fell about 4% in after-hours trading.

United and other US and international carriers suspended their flights to Israel earlier this month. United had more service to Israel than any other US-based airline, with service from Washington, D.C.; Newark, New Jersey; and San Francisco.

United said its fourth-quarter revenue would rise 9% year-over-year, 10.5% if Israel flights are suspended until the end of the year, and 10.5% if the suspension lasts through October. United said its costs excluding fuel will rise 3.5% to 5% in the fourth quarter through 2022.

After a strong summer for air travel, the service has been suspended with revenue growth to international destinations outpacing sales of domestic tickets. That puts big, global carriers like United and Delta in a better position than some discount airlines like Spirit, which focus more on U.S. cities and expect losses.

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Here’s what United said In the third quarter compared to what Wall Street expected, based on average estimates compiled by LSEG, formerly Refinitiv:

  • Adjusted earnings per share: $3.65 and the expected $3.35
  • Total Revenue: $14.48 billion vs. $14.44 billion expected

United’s third-quarter net income was $1.14 billion, or $3.42 a share, up from $942 million, or $2.86 a share, a year ago. Adjusting for one-time items, United posted earnings of $3.65 per share.

Revenue rose to $14.48 billion from $12.88 billion.

The carrier will hold a call with analysts and the media at 10:30 a.m. ET on Wednesday as it faces questions about how the carrier plans to reduce fourth-quarter demand and rising costs.

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