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Shares of United Airlines are rising as the company tops first quarter earnings expectations, provides insights into guidance amid macroeconomic uncertainty. Uh, Third Bridge Global Head of Sector and Analysis, Peter McNally joins us now with a closer look at first quarter results for United Airlines. Peter, it is great to have you on the show. I'm just looking this stock is ripping here in the after hours, Peter. It's up about six and a half percent. But let me get your your take, your response to the report, the results, Peter.

Well, I think there's a couple things to keep in mind here is uh, you know, number one expectations were set pretty low um, at this point. Estimates have been coming down for a month started by Delta's pre-announcement, um, in the middle of March. But the second thing is, you know, United sort of put a stake in the ground here in a recession scenario. Uh, their earnings estimates will be seven to nine dollars a share. So, um, and that would be with a 5% decline in revenue and they're not, you know, they're not sitting back. They're cutting 4% of capacity starting at mid-year, uh, adding on to what they've already done as we've seen a slowdown in demand for, you know, for air travel. And so the big picture is, it's still a pretty profitable airline, um, despite some of the headwinds that have emerged here in the first three and a half months of the year.

Peter, Simeon Hyman is that fair to extrapolate that to the sector? You think of airlines as quite cyclical and not being able to do that well in a recession. So they're saying it won't be that bad. Can we extrapolate it?

Uh, I would not. Uh, look, the one thing about United is that they've always been investing for growth. And so they're taking even more planes that are more efficient and allow for more premium seating. And and that's where the money is made. And then the real distinguishing factor for Delta United and to a lesser extent American is their loyalty programs that have been a great competitive advantage. And that's going to add to earnings. These smaller regional airlines and uh, the low-cost carriers are finding it more difficult to compete because they got smaller fleets, okay? And they're dependent also on Boeing delivering new planes or you know, and and some more competitive routes, um, and it's more difficult for them. So I think United's a standout. They've been investing aggressively for years, like in this fleet, and it sometimes has made people nervous. But at the end of the day, you know, it's it's always worked out for them. Um, so that's why I don't think I would, you know, extrapolate this to the rest of the rest of the industry just yet.