February 26, 2024

A United Airlines plane flies in front of the Empire State Building and One Vanderbilt in New York City on December 3, 2021, as it prepares to land at Newark Liberty Airport in Newark, New Jersey.

Gary Hershorn | Corbis News | Getty Images

united airlines reported record quarterly earnings on Wednesday and forecast a strong third quarter, thanks to an ongoing travel boom driven by the return of international travel.

The airline lost some capacity in the second quarter due to flight disruptions at its Newark, New Jersey, hub. But its quarterly results and forecast still topped analysts’ expectations due to strong demand.

The stock rose about 3% in after-hours trading following the report.

United is the second U.S. airline to report its most recent quarterly results, the same as Delta Airlines“The outlook for tourism demand is positive. American airlines Earnings report before market open on Thursday.

United and other airlines have been expanding their international services to take advantage of strong bookings after years of pandemic slump. The airline’s revenue from international flights accounts for about 40% of its total sales, but is growing faster than domestic sales.

What’s this united airlines report The second-quarter results compared with Wall Street expectations, according to average estimates compiled by Refinitiv:

  • Adjusted earnings per share: $5.03 vs. $4.03 expected
  • Total revenue: $14.18 billion vs. $13.91 billion expected

United reported net income of $1.08 billion, or $3.24 a share, compared with $329 million, or $1 a share, a year earlier. Adjusting for items that include pilot bonuses as part of a new preliminary labor agreement, the company earned $1.67 billion, or $5.03 a share.

A 26% reduction in fuel costs helped boost United’s bottom line.

Meanwhile, revenue per available seat mile fell 0.4% from a year earlier. Compared with the second quarter of 2022, the capacity increase is 17.5%, which is one percentage point lower than United’s planned flight volume before the disruption of the Newark flight.

United CEO Scott Kirby said earlier this month that the airline would have to reduce flights at Newark Liberty International Airport. A series of thunderstorms in early summer derailed United’s operations at the airport, disrupting thousands of flights and displacing passengers and crew.

“Manchester United persevered through an unprecedented series of events at the end of last month,” Kirby said in Wednesday’s earnings release. “They are the best in the business and we are focused on the important changes we can make, particularly in Newark, to better serve our customers.”

Kirby said earlier this month that the airline would have to reduce flights at hubs serving the New York City area to avoid disruptions when flights jam at congested airports.

Still, United expects capacity to grow about 16% in the three months ending Sept. 30 from last year, and expects revenue growth of as much as 13% in the same period in 2022. United expects third-quarter adjusted earnings in the range of $3.85 to $4.35 a share, well above analysts’ forecast of $3.70 a share, according to Refinitiv data.

Over the weekend, United and its pilots union said they had reached a preliminary labor agreement that would give pilots pay increases of up to 40% over four years, an agreement that took years to negotiate.

The union estimated the deal was worth $10 billion. The deal still needs to be approved by United’s 16,000 pilots, but could end years of negotiations as United seeks to add to its pilot fleet amid a pilot shortage.

Executives from the airline will likely face questions on both topics during a conference call with analysts at 10:30 a.m. ET on Thursday.