United Airlines (UAL) earnings 3Q 22

A United Airlines Boeing 737 Max 9 aircraft lands at San Francisco International Airport on March 13, 2019 in Burlingame, California.

Justin Sullivan | Getty Images

United Airlines forecast another profit for the end of the year and said consumer appetite for travel shows no signs of abating, despite high airfares.

Shares rose more than 7% in after-hours trading on Tuesday.

“As we look ahead to the end of the year, the airline expects the strong COVID recovery trends to continue to overcome recessionary pressures in the macroeconomic environment,” United said in an earnings release. “The airline now expects its fourth quarter adjusted operating margin to be above 2019 for the first time.”

The Chicago-based airline posted third-quarter profit of $942 million, down 8% from three years ago, and $12.88 billion in revenue, which was ahead of analysts’ estimates and up 13% from 2019.

Adjusted for one-time items, United earned $2.81 per share, easily topping the $2.28 expected by analysts polled by Refinitiv.

United said it expects adjusted earnings per share of as much as $2.25 for the fourth quarter, well ahead of analysts’ estimates of 98 cents, according to Refinitiv.

The strong summer travel season and sunny outlook for the rest of the year show consumers are willing to pay for travel, a turnaround from early in the pandemic when Covid-19 restrictions decimated travel demand. Delta Air Lines last week it said it brought in record revenue for the third quarter and forecast another profit for the fourth quarter.

The upbeat outlook from airline executives contrasts with other sectors that have struggled this year, including parts of retail and some streaming platforms that were the recipients of shutdowns early in the pandemic.

Here’s how United performed in the third quarter compared to what Wall Street expected, based on average estimates compiled by Refinitiv:

  • Adjusted earnings per share: $2.81 against an expected $2.28
  • Total revenue: 12.88 billion dollars against the expected 12.75 billion dollars.

US airline executives have recently noted strong demand to Europe well past the summer peak and into the fall, and are keeping more capacity in those markets in response, CNBC reported last month.

Airlines remain limited in the number of flights they can offer as aircraft deliveries are delayed due to supply chain issues and other problems, and airlines struggle to hire and train new staff, especially pilots.

Limited supplies of flights keep prices up. United said its third-quarter revenue per available seat mile was up more than 25% from three years earlier. For the current quarter, it expects the calculation to increase by as much as this amount compared to 2019.

Meanwhile, the carrier said fourth-quarter capacity is likely to be down about 10% compared to 2019, similar to third-quarter capacity.

United executives will hold a call with analysts on Wednesday at 10:30 a.m. EDT.

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