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Last Tuesday, United Airlines UAL reported strong fourth-quarter 2024 results, driven by upbeat air travel demand, improved pricing power and lower fuel prices. The company's earnings outlook for the first quarter of 2025 and full-year 2025 were also promising.
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The upbeat results and the rosy outlook naturally give rise to the question as to whether investors should add UAL stock to their portfolios now for healthy returns or wait for a better entry point? Before we check the investment worthiness of United Airlines stock, let us take a look at the company’s fourth-quarter performance in brief.
Highlights of Q4 Earnings
United Airlines reported fourth-quarter 2024 earnings (excluding 31 cents from non-recurring items) of $3.26 per share, which surpassed the Zacks Consensus Estimate of $3.01. The bottom line increased 63% on a year-over-year basis. Operating revenues of $14.7 billion beat the Zacks Consensus Estimate of $14.4 billion. The top line increased 7.8% year over year, driven by a 6.9% rise in passenger revenues. Upbeat passenger volumes during the winter holiday period boosted the top line in the quarter. The Chicago-based carrier's transatlantic bookings for the 2024 winter were 30% higher than pre-COVID levels.
UAL’s results benefited from strong demand for the more expensive business class seats. Upbeat international travel demand also aided results. Additionally, this Chicago-based carrier’s substantial investment in its loyalty program paid off with loyalty revenues increasing 12% year over year in the fourth quarter of 2024.
Cargo revenues, too, were impressive, up 30% year over year. In the December quarter, sales of its premium and basic economy seats were up 10% and 20% year on year, respectively. Corporate bookings rose 7% from a year ago.
UAL is the second S&P 500 member in the Zacks Airline industry to report fourth-quarter results, after Delta Air Lines’ DAL impressive results on Jan. 10. Another S&P 500 airline stock, Southwest Airlines LUV, is scheduled to report fourth-quarter 2024 results on Jan. 30.
Upbeat Earnings Estimate Revisions Post UAL’s Rosy Guidance
UAL expects strong and broad-based demand for travel across all geographies to continue in 2025. International passenger revenues are also likely to remain strong throughout 2025 with demand for international flights being robust.
For the first quarter of 2025, UAL expects adjusted EPS in the range of 75 cents-$1.25. The Zacks Consensus Estimate at the time of the earnings release was 65 cents. For 2025, UAL expects adjusted EPS between $11.50 and $13.50. The Zacks Consensus Estimate of $12.56 at that time was within the guidance range.