Al Schard
Member
United Airlines' stock climbed over 17% on Wednesday, reaching a seven-month peak, after the airline projected second-quarter earnings that surpassed Wall Street expectations. This positive outlook comes despite continued delays in aircraft deliveries from Boeing.
The company anticipates earnings ranging from $3.75 to $4.25 per share for the second quarter, which exceeds the analysts' forecast of approximately $3.76 per share. Notably, airlines typically generate the majority of their annual profits during the second and third quarters, aligning with peak travel seasons.
Furthermore, United reiterated its full-year earnings guidance, projecting earnings between $9 and $11 per share.
However, United has revised its aircraft delivery expectations for the year, now planning to receive only 61 new narrow-body aircraft, a decrease from the previously expected 101. The airline had initially projected contracts for up to 183 planes in 2024.
“We’ve adjusted our fleet plan to better reflect the reality of what the manufacturers are able to deliver,” stated CEO Scott Kirby in an earnings release. “And, we’ll use those planes to capitalize on an opportunity that only United has: profitably grow our mid-continent hubs and expand our highly profitable international network from our best in the industry coastal hubs.”
In response to production limitations and increased federal scrutiny faced by Boeing, United announced plans to lease 35 Airbus A321neos in 2026 and 2027, indicating a shift towards Boeing’s competitor.
Moreover, the airline has adjusted its annual capital expenditure forecast, lowering it from approximately $9 billion to $6.5 billion.
United's operational plans have also been affected by a Federal Aviation Administration safety review, which has led to delays in planned service expansions. A company spokeswoman conveyed to CNBC earlier this month that due to the review, United would have to delay its new routes from Newark, New Jersey, to Faro, Portugal, and from Tokyo to Cebu, Philippines. Despite these challenges, the review is not expected to significantly impact the airline's overall capacity for the year.
Earlier this month, United postponed its investor day originally scheduled for May, citing the need to focus on the FAA review. “Because our entire team is focused on cooperating with the FAA to review our safety protocols and it would simply send the wrong message to our team to have an exciting investor day focused primarily on financial results,” the company explained.
Additionally, with the limited availability of new aircraft, United has paused pilot hiring this month and is offering pilots unpaid leave in May, as reported by CNBC.
The company anticipates earnings ranging from $3.75 to $4.25 per share for the second quarter, which exceeds the analysts' forecast of approximately $3.76 per share. Notably, airlines typically generate the majority of their annual profits during the second and third quarters, aligning with peak travel seasons.
Furthermore, United reiterated its full-year earnings guidance, projecting earnings between $9 and $11 per share.
However, United has revised its aircraft delivery expectations for the year, now planning to receive only 61 new narrow-body aircraft, a decrease from the previously expected 101. The airline had initially projected contracts for up to 183 planes in 2024.
“We’ve adjusted our fleet plan to better reflect the reality of what the manufacturers are able to deliver,” stated CEO Scott Kirby in an earnings release. “And, we’ll use those planes to capitalize on an opportunity that only United has: profitably grow our mid-continent hubs and expand our highly profitable international network from our best in the industry coastal hubs.”
In response to production limitations and increased federal scrutiny faced by Boeing, United announced plans to lease 35 Airbus A321neos in 2026 and 2027, indicating a shift towards Boeing’s competitor.
Moreover, the airline has adjusted its annual capital expenditure forecast, lowering it from approximately $9 billion to $6.5 billion.
United's operational plans have also been affected by a Federal Aviation Administration safety review, which has led to delays in planned service expansions. A company spokeswoman conveyed to CNBC earlier this month that due to the review, United would have to delay its new routes from Newark, New Jersey, to Faro, Portugal, and from Tokyo to Cebu, Philippines. Despite these challenges, the review is not expected to significantly impact the airline's overall capacity for the year.
Earlier this month, United postponed its investor day originally scheduled for May, citing the need to focus on the FAA review. “Because our entire team is focused on cooperating with the FAA to review our safety protocols and it would simply send the wrong message to our team to have an exciting investor day focused primarily on financial results,” the company explained.
Additionally, with the limited availability of new aircraft, United has paused pilot hiring this month and is offering pilots unpaid leave in May, as reported by CNBC.