United Airlines shares rise on improved earnings forecast
US airline raises full-year earnings guidance due to increased travel demand
Chicago-based airline United has raised its earnings forecast for the year ahead, citing increased demand from travellers for improved growth.
The company reported an increase in third-quarter turnover of 3.4pc, slightly below analyst expectations. Third-quarter net income jumped nearly 23% to more than $1.02 billion (£800m)from the same period the previous year, on revenue of $11.38 billion, an increase of 3.4% from a year ago.
Shares rose in after-hours trading after United chief executive Oscar Munoz said in a In astatement that the airline was “ahead of pace” to meet its per-share earnings goal of $11 to $13 by the end of 2020. United (UAL:NASDAQ) raised its forecast for 2019 earnings to $11.25 to $12.25 a share, up from its previous forecast of $10.50 to $12.
The airline also reported other key metrics. Revenue per available seat mile for the third quarter increased 1.7% year-over-year, whilst unit cost per available seat mile decreased 0.9% year-over-year.
Mr Munoz said that the company had engaged in a share buyback, repurchasing $363 million of its common shares in the third quarter of 2019 at an average price of $88.22 per share.
United gave no update on the effect of the grounding of the Max 737 plane, which is now in its eighth month and is affecting flight schedules has caused thousands of flights to be cancelled. The airline mentioned several initiatives it has recently introduced, including removing the expiry date on MileagePlus award miles, introducing complimentary snacks on domestic flights, and launching a new tool for customers with flight connections, called ConnectionSaver.