United Airlines (UAL) Q3 2024 earnings

United Airlines The airline said Tuesday it had initiated a $1.5 billion stock buyback as the carrier reported higher-than-expected earnings for the busy summer travel season and forecast strong results for the final three months of the year.

United expects to earn between $2.50 and $3.00 adjusted per share in the fourth quarter, compared with $2.00 per share a year earlier and an estimate of $2.68 by analysts polled by LSEG.

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

• EPS: $3.33 was revised from $3.17 expected
• profit: $14.84 One billion dollars, compared to an expected 14.78 billion dollars

The stock buyback will be United’s first since before the Covid-19 pandemic. US airlines received more than $50 billion in government aid during the pandemic travel downturn that banned stock buybacks and dividends, although airlines are still struggling for financial stability.

Southwest Airlines It announced a $2.5 billion stock buyback program last month.

“Like other airlines and other leading companies, we have initiated a strategic and thoughtful stock repurchase program,” United CEO Scott Kirby said in a memo to employees Tuesday. “Most importantly, my commitment to you is that investing in our people and our business will always be my top priority even as we create this stock repurchase program.”

For the third quarter, United had revenue of $14.84 billion, up 2.5% from a year earlier and above analyst estimates. It recorded net income of $965 million, down 15% from last year.

United said domestic unit revenues were positive in August and September compared to last year as airlines cut back on a glut of flights that drove down prices. United expanded capacity by 4.1% in the third quarter. The carrier said comp revenue rose 13% in the quarter. Premium revenue, including business class tickets, rose 5%; Sales of basic, no-frills economy tickets were up 20%.

Last week, the airline revealed a large-scale expansion for next year that included new flights to Mongolia, Senegal, Spain and Greenland in the pursuit of demand for international travel.

After adjusting for one-time items, United reported earnings per share of $3.33, beating Wall Street expectations and United’s July estimate of $2.75 to $3.25 per share.

Airline executives will hold a call with analysts at 10:30 a.m. EST on Wednesday and will likely face questions about demand for the end of the year and into 2025, as well as production problems at BoeingMost factories stopped working during the mechanics’ strike, which lasted for more than a month.