By Tomi Kilgore
Air carrier’s stock falls as revenue extends its streak of misses, to offset another profit beat
United Airlines expects strong travel demand leading to record revenue in the holiday quarter, but the stock fell after third-quarter revenue missed expectations, again.
Shares of United Airlines Holdings Inc. fell in after-hours trading Wednesday, after the air carrier reported revenue that missed expectations for a third straight quarter, which took the shine off an upbeat travel outlook over the holidays.
The revenue miss comes even after profits continued to beat Wall Street’s projections, and after the company said it was “thriving” despite uncertainties about the economy, thanks to strong demand from flyers seeking premium services and from members of its frequent-flyer programs.
United’s stock (UAL) declined 1.9% in Wednesday’s after-hours session, after closing the regular session up 0.9% at a four-week high.
Net income for the quarter to Sept. 30 slipped 1.7% to $949 million, while adjusted earnings per share, which excludes nonrecurring items, of $2.78 beat the FactSet consensus of $2.65. That marked the 13th straight quarter United had beat bottom-line expectations.
Meanwhile, total revenue rose 2.6% from the same period a year ago to $15.23 billion, but that was below the average analyst revenue estimate compiled by FactSet of $15.33 billion.
Revenue from premium seats increased 6% and revenue from its loyalty program members grew 9%, to outpace revenue growth from basic economy seating of 4%.
Passenger revenue, which excludes cargo and other revenue, rose 1.9% to $13.82 billion, with domestic revenue increasing 3.1%.
The company said the growth momentum, particularly in premium and loyalty flyers, has continued into the current fourth quarter. As a result, United now expects the fourth quarter to have “the highest total operating revenue for a single quarter in company history.”
United’s positive outlook comes a week after rival Delta Air Lines Inc. (DAL) made similar comments about its outlook for the rest of the year, with sales trends accelerating, particularly among premium flyers.
United’s stock has gained 7.2% in 2025 through Wednesday, while the U.S. Global Jets ETF JETS has edged up 0.7% and the S&P 500 index SPX has advanced 13.4%.
-Tomi Kilgore
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10-15-25 2017ET
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