Adjusted earnings come in lower than Wall Street expected, CEO warns of effects of higher fuel costs and ‘operational challenges’
United Airlines Holdings Inc. shares fell in the extended session Wednesday after the airline fell short of Wall Street estimates even as it reported its first profitable quarter since COVID-19 began.
United UAL, +0.51% shares dropped 7% after hours, following a 0.5% rise to close the regular session at $41.68.
The airline reported second-quarter net income of $329 million , or $1 a share, after a loss of $434 million, or $1.34 a share, a year ago. Adjusted earnings, which factored out items like investment losses and gains, came in at $1.43 a share, versus an adjusted loss of $3.91 a share in the year-ago period.
Revenue rose to $12.11 billion from $5.47 billion in the year-ago period. Total revenue per available seat mile surged to a record 19.35 cents from 13.81 cents in the year-ago period, and from 15.57 cents in the second-quarter of 2019, the company said.
Analysts surveyed by FactSet had forecast adjusted earnings of $1.85 a share on revenue of $12.12 billion.
“It’s nice to return to profitability — but we must confront three risks that could grow over the next 6-18 months,” said Scott Kirby, United chief executive, in a statement. “Industrywide operational challenges that limit the system’s capacity, record fuel prices and the increasing possibility of a global recession are each real challenges that we are already addressing.”
United Airlines said the average price of fuel for the quarter was $4.18 a gallon, compared with $1.97 a gallon in the year-ago quarter.
Executives plan to hold a conference call at 10:30 a.m. Eastern time Thursday to discuss the results.