United Airlines (UAL) shares dropped in pre-market trading following the release of a subdued near-term outlook. Despite a strong third-quarter earnings report, the airline’s forecast for the current financial year fell short of expectations. The company reported adjusted earnings of $3.65 per share for the third quarter, a 30% increase from the same period last year and higher than the Street forecast of $3.35 per share. Revenues also rose by 12.5% to $14.5 million, with profit margins increasing to 12.2%. However, United expects adjusted earnings of $1.50 to $1.80 per share for the rest of the year, below the estimated $2.06 per share and down 33% from last year. Rising fuel costs and the suspension of flights to Israel are expected to impact United’s costs and capacity bases.
CEO Scott Kirby expressed confidence in the company’s strategy to diversify revenue streams and capitalize on growth opportunities. Despite the near-term challenges, he believes that United Airlines remains on track to meet its financial targets. In pre-market trading, United Airlines shares were down 5.03% to $38.10 each. This news comes after Delta Air Lines, United’s larger rival, also cautioned about the impact of rising jet fuel prices on overall profits, leading to a downward revision of its 2023 forecast.
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