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United Airlines (UAL) Q3 2023 Results

Boeing 787-10 Dreamliner, from United Airlines, taking off from Barcelona Airport, in Barcelona, ​​on March 28, 2023.

JanValls | Nuphoto | Getty Images

United Airlines said more expensive jet fuel and the carrier’s shutdown of flights to Tel Aviv during Israel’s war with Hamas would eat into its profits in the final three months of the year.

For the current quarter, the Chicago-based carrier estimates adjusted earnings of between $1.50 and $1.80 per share, below analysts’ forecasts of $2.06.

United would then earn between $9.55 and $9.85 per share, on an adjusted basis, down from its July forecast of between $11 and $12 per share, based on its projection for the fourth quarter. Jet fuel prices at major U.S. airports have increased nearly 25% since the start of summer.

Its shares fell about 4% in after-hours trading.

United and other U.S. and international airlines halted flights to Israel earlier this month. United offered more service to Israel than any US-based airline flying from Washington DC, Newark, New Jersey and San Francisco.

United said its fourth-quarter revenue would increase year over year by between 9%, if flights to Israel remain suspended until the end of the year, and 10.5% if the suspension only lasts until October. Its costs, excluding fuel, will likely increase between 3.5% and 5% in the fourth quarter from 2022, United said.

The suspension of service comes after a robust summer for air travel, with revenue growth for international destinations outpacing domestic ticket sales. This brought major international carriers like United and Delta on better footing than some low-cost airlines like Spiritwho are focusing more on American cities and expecting losses.

Here’s what United reported for the third quarter compared to what Wall Street expected, based on average estimates compiled by LSEG, formerly known as Refinitiv:

  • Adjusted earnings per share: $3.65 versus $3.35 expected
  • Total income: $14.48 billion versus $14.44 billion expected

United reported third-quarter net income of $1.14 billion, or $3.42 per share, compared with $942 million, or $2.86 per share, a year earlier. Including one-time items, United posted earnings per share of $3.65 per share.

Revenue increased from $12.88 billion to $14.48 billion.

The carrier will hold a call with analysts and media on Wednesday at 10:30 a.m. ET, during which they will face questions about fourth-quarter demand and how the carrier plans to rein in rising costs.

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