United Airlines UAL is scheduled to report first-quarter 2023 results on Apr 18 after market close.
UAL has a solid earnings surprise history, having outperformed the Zacks Consensus Estimate in two of the preceding four quarters, the average beat being 5.42%.
United Airlines Holdings Inc Price and EPS Surprise
United Airlines Holdings Inc price-eps-surprise | United Airlines Holdings Inc Quote
Let’s see how things are shaping up for United Airlines this earnings season.
The Zacks Consensus Estimate for United Airlines’ first-quarter 2023 revenues is pegged at $11.41 billion, indicating 50.75% growth year over year. The top line is likely to have been aided by a solid recovery of air-travel demand (post the pandemic-led slump) and an improvement in passenger revenues (which accounts for more than 80% of total revenues).
Driven by solid demand, management expects first-quarter 2023 total operating revenues to be up almost 51% year over year (prior view: up 50% year over year). Notably, higher capacity in the quarter is contributing to UAL’s top-line performance. As a result, the capacity is now expected to improve 23% from the year-ago reported figure (prior view: up 20%).
On the flip side, high fuel costs per gallon are likely to have hurt the bottom line in the first quarter. UAL now forecasts first-quarter 2023 average aircraft fuel price per gallon between $3.31 and $3.41 (prior view: $3.19).
For the first quarter of 2023, United Airlines now anticipates a loss per share of 60 cents-$1.00 against the prior expected earnings per share of 50 cents-$1.00 (provided with the company’s fourth-quarter 2022 results on Jan 17). The Zacks Consensus Estimate for the first quarter is pegged at a loss of 48 cents per share.
UAL is likely to expect a loss in the first quarter due to an expense related to the new collective bargaining deal with employees represented by the Air Line Pilots Association. This associated expense shifted from the second quarter of 2023 to the first quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for United Airlines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
United Airlines has an Earnings ESP of -22.87% and a Zacks Rank #3.
Highlights of Q4
United Airlines’ fourth-quarter 2022 earnings of $2.46 per share beat the Zacks Consensus Estimate of $2.07. In the year-ago quarter, UAL incurred a loss of $1.60 per share when air-travel demand was not as buoyant as in the current scenario. The fourth quarter of 2022 was the third consecutive profitable quarter at UAL since the onset of the pandemic.
Operating revenues of $12,400 million beat the Zacks Consensus Estimate of $12,230 million. UAL’s revenues increased 51.37% year over year owing to upbeat air-travel demand.
Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these too have the right combination of elements to beat their first-quarter 2023 earnings.
Canadian National Railway Company CNI has an Earnings ESP of +1.67% and a Zacks Rank #3. CNI will release results on Apr 24.
CNI delivered a trailing four-quarter earnings surprise of 3.46%, on average. The Zacks Consensus Estimate for CNI’s first-quarter 2023 earnings has increased 18.3% year over year.
CNI has a long-term earnings growth rate of 7.72%.
Kirby Corporation (KEX) has an Earnings ESP of +0.52% and a Zacks Rank #3. KEX will release results on Apr 27. You can see the complete list of today’s Zacks #1 Rank stocks here.
KEX has an expected earnings growth rate of 68.57% for the current year. KEX delivered a trailing four-quarter earnings surprise of 3.78%, on average.
KEX has a long-term earnings growth rate of 12%.
Landstar System, Inc. (LSTR) has an Earnings ESP of +0.36% and a Zacks Rank #3. LSTR will release results on Apr 26.
Landstar delivered a trailing four-quarter earnings surprise of 0.21%, on average. Landstar has a long-term earnings growth rate of 12%.
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