United tops profit forecasts even as Boeing 737 MAX crisis drags on




United tops profit forecasts even as Boeing 737 MAX crisis drags on


By Tracy Rucinski

CHICAGO (Reuters) - United Airlines Holdings Inc (O:UAL) on Tuesday beat Wall Street estimates for quarterly profit and held to its 2020 profit target, with a turnaround strategy overseen by its outgoing CEO underpinning growth even as the Boeing (NYSE:BA) 737 MAX remains grounded.

Chicago-based United is one of three U.S. airlines cancelling more than 1,000 monthly flights in a hit to profits as the 737 MAX remains grounded following two deadly crashes in Indonesia and Ethiopia. Boeing said on Tuesday it does not expect to win approval for the return of the 737 MAX to service until mid-year, longer than previously forecast.

United's adjusted net income rose to $676 million, or $2.67 per share, in the fourth quarter to Dec. 31, from $657 million a year earlier, topping a Wall Street consensus forecast for $2.65 per share.

While the airline has warned of a negative hit from the MAX grounding, it did not disclose any estimated financial impact from the fallout and stood by its full-year adjusted EPS range of $11 to $13.

Total operating revenue rose to $10.89 billion, boosted by Chief Executive Oscar Munoz's three-year strategy to build up the airline's flight connections through its main U.S. hubs. United President Scott Kirby will replace Munoz as CEO later this year.

Major U.S. airlines are benefiting from strong leisure and corporate travel demand, a trend that looked set to continue in the first quarter.

Revenue per mile flown, a closely watched industry measurement, rose 0.8% in the fourth quarter and United forecast similar growth in the first quarter.

The company had already announced a non-cash impairment charge of $90 million in the fourth quarter related to its Hong Kong routes, following anti-government protests in the city.

It did not comment in the earnings release on the potential impact of the Wuhan coronavirus in China, which J.P.Morgan analyst Jamie Baker said poses a near-term overhang for airlines.

In a separate statement, United said there is currently no impact on its operations from the outbreak and that it remains in close contact with U.S., Asian and Chinese authorities on safety.

United management will host a conference call to discuss results on Wednesday at 10:30 a.m. EST (1630 GMT).

Fellow U.S. MAX operators Southwest Airlines Co (N:LUV) and American Airlines Group Inc (O:AAL) are due to report quarterly results on Thursday.

United, Southwest and American are all scheduling without the MAX until early June though that timeline will likely need to be pushed back following Tuesday's guidance from Boeing.





Related News

Coronavirus could be knockout blow for Hong Kong's once-thriving tourism, retail sectors
Today, 01:18
By Sarah Wu and Donny Kwok HONG KONG (Reuters) - Tom Bennell's olive oil distribution business took a heavy beating during months of pro-democracy protests that emptied Hong Kong hotels and restaurants, his major customers. Now he fears a
Japan finance minister watching coronavirus impact, to ensure fiscal policy steps
Today, 01:15
TOKYO (Reuters) - Japanese Finance Minister Taro Aso said on Tuesday he would ensure that fiscal policy steps would be taken as needed to respond to the spreading coronavirus outbreak while closely monitoring its impact on the economy. Aso told
Japan Inc wary about wage hikes as 'Abenomics' sputters: Reuters poll
Today, 01:12
By Tetsushi Kajimoto TOKYO (Reuters) - Three-fifths of Japanese firms plan to keep overall compensation flat or even cut it in the coming business year, a Reuters poll found, in a further blow to the government's attempts to boost incomes and
Tokyo commuters bound for Olympic crowd crush as Japan Inc rules out work from home
Today, 01:09
By Chris Gallagher TOKYO (Reuters) - When Emi Tanimura failed to find a daycare slot for her new-born daughter, she had to take a radical step for Japan to avoid a long time away from her job at communications firm Sunny Side Up (T:2180). She
Messi, Hamilton joint winners of Sportsman of the Year at Laureus Awards
Today, 01:06
(Reuters) - Formula One champion Lewis Hamilton and Barcelona forward Lionel Messi were declared joint winners of the Laureus World Sportsman of the Year Award in Berlin on Monday, with the voting tied for the first time in the awards' 20-year



Latest News
Coronavirus could be knockout blow for Hong Kong's once-thriving tourism, retail sectors
18.02.2020 01:18
By Sarah Wu and Donny Kwok HONG KONG (Reuters) - Tom Bennell's olive oil distribution business took a heavy beating during months of pro-democracy protests that emptied Hong Kong hotels and restaurants, his major customers. Now he fears a knockout blow as the city fights the coronavirus. The two-decade-old Olives and Oils supplies more than
Read more
Japan finance minister watching coronavirus impact, to ensure fiscal policy steps
18.02.2020 01:15
TOKYO (Reuters) - Japanese Finance Minister Taro Aso said on Tuesday he would ensure that fiscal policy steps would be taken as needed to respond to the spreading coronavirus outbreak while closely monitoring its impact on the economy. Aso told reporters after a cabinet meeting that economic fundamentals that supported domestic demand were holding
Read more
Japan Inc wary about wage hikes as 'Abenomics' sputters: Reuters poll
18.02.2020 01:12
By Tetsushi Kajimoto TOKYO (Reuters) - Three-fifths of Japanese firms plan to keep overall compensation flat or even cut it in the coming business year, a Reuters poll found, in a further blow to the government's attempts to boost incomes and stronger economic growth. The world's third largest economy shrank at the fastest pace in six
Read more
Tokyo commuters bound for Olympic crowd crush as Japan Inc rules out work from home
18.02.2020 01:09
By Chris Gallagher TOKYO (Reuters) - When Emi Tanimura failed to find a daycare slot for her new-born daughter, she had to take a radical step for Japan to avoid a long time away from her job at communications firm Sunny Side Up (T:2180). She started working from home. Now a mother of two, she still works flexible hours, including time at home, as
Read more
Messi, Hamilton joint winners of Sportsman of the Year at Laureus Awards
18.02.2020 01:06
(Reuters) - Formula One champion Lewis Hamilton and Barcelona forward Lionel Messi were declared joint winners of the Laureus World Sportsman of the Year Award in Berlin on Monday, with the voting tied for the first time in the awards' 20-year history. Mercedes driver Hamilton won his sixth world championship in 2019, with 11 race wins and 17
Read more