United Airlines' profit doubles despite shutdown, 737 woes
FILE - In this July 18, 2018, file photo a United Airlines commercial jet sits at a gate at Terminal C of Newark Liberty International Airport in Newark, N.J. United Continental Holdings, Inc. reports financial results Tuesday, April 16, 2019. (AP Photo/Julio Cortez, File)
United Airlines said Tuesday that its first-quarter profit doubled to $292 million as it carried more passengers and limited costs other than fuel.
The results beat Wall Street expectations for a quarter that began with the partial government shutdown, which dinged travel by federal employees, and ended with Boeing 737 Max jets grounded around the world.
The airline gave an upbeat forecast of second-quarter revenue trends. However, Chicago-based United did not raise its full-year earnings prediction.
Executives of parent United Continental Holdings Inc. are scheduled to talk about the results with analysts and reporters on Wednesday. In a message to employees, CEO Oscar Munoz said the latest results vindicated a strategy of adding more flights, investing in customer service and managing costs.
The second quarter is likely to benefit slightly by having Easter travel fall entirely in April, unlike last year. At United, that could be offset, however, by the additional costs of managing around the grounding of its 14 Max planes.
Regulators around the world grounded the Max last month after a second deadly crash. As a result, American and Southwest have removed thousands of flights from their schedules out into August. United, which has fewer Max jets than those two rivals, has claimed to be less affected.
United removed the planes from its schedule into July and is shuffling other planes to make do. In some cases, United has substituted large, two-aisle planes to fly domestic routes previously flown by the single-aisle 737, which is more expensive.
United said that first-quarter earnings, adjusted to exclude one-time gains and costs, came to $1.15 per share.
The average prediction of 19 analysts surveyed by Zacks Investment Research was for 94 cents per share.
Revenue rose 6% to $9.59 billion. Analysts in the Zacks survey were looking for $9.6 billion on average. The airline carried 6% more passengers than a year ago.
United predicted that a key figure — revenue for each seat flown one mile — would rose between 0.5% and 2.5% in the second quarter when compared with the same period last year. That is a closely watched figure and, though while not perfect, indicates that the airline expects slightly higher fares than last spring.
Despite beating forecasts for the first quarter, United did not change its forecast for full-year earnings — between $10 and $12 per share.
Shares of United Continental Holdings Inc. rose 65 cents to close at $85.17 before the first-quarter results were posted. After nearly two hours of extended trading, they were up another $3.08, or 3.5%, to $88.25. At the closing price, the shares had gained 2% this year and 27% in the last 12 months.
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David Koenig can be reached at http://twitter.com/airlinewriter