United Airlines earnings up 40% in Q2 to $818 million

United Airlines earnings up 40% in Q2 to $818 million


United Continental reported earnings and revenues that exceeded market expectations. United Airlines (UAL), the result of the merger between United and Continental Airlines, earned a net profit of $914 million in the first half, an increase of 1.4% over the same period of 2016, the costs.

The company reported net profit of $818 million from April through June, an increase of 39.1% compared to the same period last year. The half-yearly turnover reached US $18.42 billion, an increase of 4.7% compared to a year ago, according to data provided by the third airline in the United States by passenger volume.

Operational revenues reached US $ 10 billion, an increase of 6.4% compared to the 2016 period. Second-quarter traffic rose 5.7%, while Capacity, increased by 5.3%.

The group increased its costs by 7.9% in the first half to 16,743 million dollars. Specifically, its fuel outflow increased 21% to $3.229 billion.

Consolidated unit cost per available seat mile (CASM) increased by 2.6% compared to the first half of 2016, mainly due to higher fuel costs and the impact of labor agreements ratified in 2016, although in the second quarter this item decreased by half point.

After a first quarter marked by the incident with the passenger forcibly expelled from one of its planes, which cost 800 million dollars, the airline returns to black numbers in the next three months.

CEO Oscar Munoz said they are continuing to work to improve the customer service standard: “The financial and operational progress of this quarter shows that United is on the right track. We have doubled our commitment to the user experience “.

During the second quarter, the airline received six Boeing 777-300ER, one Airbus A319 and ten Embraer E175 aircraft. The airline announced the acquisition of four additional Boeing 777-300ERs in 2018.

Despite the post-earnings selloff, Buckingham Research reaffirmed its Buy rating and $97 price target on the stock, but lowers its 2017 pre-tax outlook by 5 percent.

“We continue to like the stock 6-12 months out on pre-tax profit initiatives that should gain more critical mass in 2018,” Buckingham analyst Daniel McKenzie wrote, “though given a RASM outlook that inflects negative in 4Q17, we wouldn’t be surprised to see some rotation in the name.”

Following these results, CEO Oscar Muñoz said the figures “show that United is firmly on the right track: investing in our products and our people, redoubling our focus on customer experience, closing the margin gap with Our peers and delivering strong returns to our investors, we have made significant progress and moved United decisively forward. ”

He added that “no single quarter is a trend and we still have much more to do before we realize the potential of this airline and exceed our customers’ expectations, but we also know that one success generates another and the solid financial and operating performance we publish This quarter adds to the momentum that all of us here at United are determined to take advantage of.”

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I handle much of news coverage for tech stocks, and occasionally cover companies in different sectors. In the past, I've written for other financial sites and published independent investment research, primarily on tech companies. I have a B.A. in Economics from Columbia University. I'm based out of San Diego, but grew up in Southern New Jersey. I play basketball and tennis in my spare time, am a long-time (and long-suffering) fan of Philadelphia's sports teams, and alternate daily between using an iPad Air, a Galaxy Note 3, and one or two Windows PCs.