United Airlines’ UAL first-quarter 2025 earnings per share (excluding 25 cents from non-recurring items) of 91 cents surpassed the Zacks Consensus Estimate of 75 cents. In the year-ago quarter, the Chicago-based airline reported a loss of 15 cents per share. 

The earnings beat and the year-over-year bottom-line improvement, despite the tariff-induced uncertainties, pleased investors.  Management stated that this was the best first-quarter financial performance of UAL in five years. This resulted in the stock gaining 5.5% in yesterday’s after-market trading session.

Operating revenues of $13.21 billion fell marginally short of the Zacks Consensus Estimate of $13.22 billion. The top line increased 5.4% year over year despite the tariff-induced slowdown in domestic air travel demand. Passenger revenues (which accounted for 89.7% of the top line) increased 4.8% to $11.9 billion. The actual figure was short of our passenger revenue estimate of $12.5 billion. UAL flights transported 40,806 passengers in the first quarter, up 3.8% year over year.

Cargo revenues grew 9.7% year over year to $429 million. Revenues from other sources rose 10.5% to $923 million. We expected revenues from cargo and other sources to be $418.6 million and $852.9 million, respectively.  

Other Details of UAL’s Q1 Earnings Report

Below, we present all comparisons (in % terms) with the first quarter of 2024 figures unless otherwise stated.

Airline traffic, measured in revenue passenger miles, grew 3.6%. Capacity, measured in available seat miles, expanded 4.9%. With capacity expansion outpacing traffic growth, the consolidated load factor (percentage of seats filled by passengers) of 79.2% declined 0.9 points on a year-over-year basis.  We had expected the consolidated load factor to be 85.3%.

Consolidated passenger revenue per available seat mile (a key measure of unit revenues) inched down 0.1%. Total revenue per available seat mile increased 0.5% to 17.58 cents. The average yield per revenue passenger mile rose 1.2% to 19.93 cents. The average aircraft fuel price per gallon fell 12.2% to $2.53. Fuel gallons consumed were up 4.1%.

Operating expenses (on a reported basis) increased 1.3% to $12.6 billion. Consolidated unit cost or cost per available seat mile, excluding fuel, third-party business expenses, profit-sharing and special charges, inched up 0.3% to 13.17 cents.

UAL exited the first quarter with cash and cash equivalents of $9.37 billion compared with $8.76 billion at 2024-end. Long-term debt, finance leases and other financial liabilities were $24.4 billion at the first-quarter end. UAL generated more than $2 billion of free cash flow in the March quarter.

UAL’s Resilient Q2 Earnings Outlook 

UAL expects "resilient earnings" in the second quarter of 2025. For the second quarter, UAL expects adjusted EPS in the range of $3.25-$4.25. The Zacks Consensus Estimate is pegged at the highest point of the guided range, i.e., $4.25.

UAL’s Dual Outlook for FY25

To combat the weak demand scenario, UAL intends to reduce off-peak flying on lower-demand days. To that end, UAL aims to remove 4 points of scheduled domestic capacity, starting in the third quarter of 2025.

Given the market uncertainty and lack of clarity, UAL has offered 2025 earnings per share guidance in two scenarios – a stable environment and a recessionary environment.

In a stabilized environment, UAL expects 2025 adjusted EPS between $11.50 and $13.50. The Zacks Consensus Estimate of $10.77 is below the guided range.

For a recessionary environment, UAL, currently carrying a Zacks Rank #5 (Strong Sell), expects 2025 adjusted EPS between $7 and $9.

UAL expects adjusted capital expenditures to be less than $6.5 billion, irrespective of the environment. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

More Airline Q1 Earnings to Follow 

Many airline companies, including heavyweights like Southwest Airlines LUV and American Airlines AAL, are scheduled to report first-quarter earnings numbers next week. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Southwest Airlines is scheduled to report first-quarter 2025 earnings on April 24. The slowdown in domestic air travel demand is likely to hurt results. Low fuel costs are expected to have aided the company’s performance.

Southwest Airlines has outpaced the Zacks Consensus Estimate for earnings in three of the last four quarters (missing the mark on the other occasion). The average beat is 58.6%.

American Airlines is also scheduled to report first-quarter 2025 earnings on April 24. The slowdown in domestic air travel demand due to the tariff-induced uncertainty is likely to hurt results. Low fuel costs are expected to have aided the company’s performance.

American Airlines has widened its loss forecast for first-quarter 2025 and now expects a loss per share of 60-80 cents compared with the prior expected loss of 20-40 cents. First-quarter total revenues are now anticipated to be approximately flat on a year-over-year basis.
 

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