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United Airlines UAL is scheduled to report first-quarter 2025 results on April 15, after market close.
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The Zacks Consensus Estimate for first-quarter 2025 earnings, currently pegged at 79 cents per share, has been revised 23.3% downward in the past 60 days. In the year-ago quarter, UAL had reported a loss of 15 cents per share.
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The Zacks Consensus Estimate for first-quarter 2025 revenues is currently pegged at $13.5 billion, implying a 7.6% increase from first-quarter 2024 actuals.
UAL has an impressive earnings surprise history, as reflected in the chart below.
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Q1 Earnings Whispers for UAL
Our proven model does not predict an earnings beat for UAL this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat, which is not the case here.
The company's Earnings ESP is -5.77%. This is because the Most Accurate Estimate currently stands at 75 cents per share, 4 cents below the Zacks Consensus Estimate. UAL currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Given this backdrop, let us examine the factors that might have influenced United Airlines’ performance in the to-be-reported quarter.
We expect tariff-induced economic uncertainties and the resultant reduction in consumer and corporate confidence to have caused a slowdown in domestic air travel demand. However, with the demand for long-haul travel remaining buoyant, international passenger revenues are likely to have been impressive. United Airlines’ strong presence in international markets is likely to have boosted international passenger revenues. The metric is likely to increase 14.4% year over year, as per our model.
Labor costs are also likely to have been high, hurting bottom-line performance in the March quarter. We expect salaries and related costs to increase 12.9% in the to-be-reported quarter from the first quarter of 2024 actuals.
On a brighter note, low fuel costs due to the downtrend in oil prices are likely to have boosted the bottom-line performance. The southward movement of oil prices bodes well for UAL's bottom-line growth because fuel expenses are a significant input cost for the airline space.
UAL Price Performance & Stock Valuation
Due to the slowdown in domestic air travel demand, airline stocks have performed dismally in the January-March period. United Airlines and other key players in the Zacks Transportation - Airline industry, such as Delta Air Lines DAL and American Airlines AAL, declined in double digits in the three-month period. Shares of United Airlines, Delta Air Lines and American Airlines plunged 28.9%, 28% and 39.5%, respectively.