United Airlines (UAL) Q4 Loss Wider Than Expected, Shares Dip

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United Airlines (UAL - Free Report) incurred a loss (excluding 6 cents from non-recurring items) of $7 per share in the fourth quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $6.56. Results were hurt by coronavirus-induced weakness in air-travel demand.

Despite the optimism surrounding coronavirus vaccine distributions, the airline provided a bleak outlook for the first quarter of 2021. This, in turn, weighed on investor sentiments, causing shares of the company to dip 2.8% in after-market trading on Jan 20.

The carrier estimates total operating revenues to decline 65-70% year over year in the current quarter. The carrier stated that the outlook does not include the potential impact from accelerated COVID-19 vaccine distribution, which may lead to faster recovery in air-travel demand.

Coming back to the earnings performance, operating revenues of $3,412 million lagged the Zacks Consensus Estimate of $3,420.4 million. The top line plunged 68.7% year over year due to 75.7% drop in passenger revenues, which totaled $2,410 million in the reported quarter. However, cargo revenues surged 77.2% year over year to $560 million. Meanwhile, revenues from other sources declined 30.8% to $442 million.

United Airlines Holdings Inc Price, Consensus, and EPS Surprise

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United Airlines Holdings Inc Price, Consensus and EPS Surprise

United Airlines Holdings Inc price-consensus-eps-surprise-chart | United Airlines Holdings Inc Quote

Operating Results

Consolidated passenger revenue per available seat mile (PRASM: a key measure of unit revenues) decreased 43.8% year over year to 7.85 cents. Total revenue per available seat mile fell 27.5% to 11.12 cents. On a consolidated basis, average yield per revenue passenger mile dipped 16.6% from the year-ago quarter.

During the quarter under review, consolidated airline traffic, measured in revenue passenger miles, tumbled 70.9% year over year. Capacity (measured in available seat miles) contracted 56.8%. Consolidated load factor (percentage of seat occupancy) deteriorated 26.9 percentage points year over year to 55.6% as traffic decline was more than capacity contraction. Meanwhile, average fuel price per gallon fell 35.7% year over year to $1.35. With most of the fleet remaining grounded/under-utilized, fuel gallons consumed were down 53% to 503 million.

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Michelle Bell 1 month ago Member's comment

Too late to help me :(