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United Airlines (UAL - Free Report) is scheduled to report second-quarter 2023 results on July 19 after the market close.

UAL has a solid earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters (one miss), the average beat being 9.1%.

Let’s see how things are shaping up for United Airlines this earnings season.
 

Q2 Expectations

The Zacks Consensus Estimate for revenues is pegged at $13.9 billion, indicating 15.1% growth year over year. The top line is likely to have been aided by a solid recovery of air-travel demand (post the pandemic-led slump). Per our estimates, total passenger revenues are likely to increase 17.3% in second-quarter 2023 from second-quarter 2022 actuals.

Driven by solid demand, management expects total revenues to grow 14-16% year over year. Notably, higher capacity in the quarter under review is likely to have contributed to UAL’s top-line performance. As a result, United Airlines expects its capacity to improve by almost 18.5% from the year-ago reported figure.

On the flip side, high fuel costs per gallon are likely to have hurt the bottom line in the to-be-reported quarter. The fuel price has come down from the highs witnessed earlier, yet it remains at an elevated level. UAL forecasts the average aircraft fuel price per gallon in the $2.80-$3.00 band. Our estimate is currently pegged at 2.83 per gallon.

United Airlines anticipates earnings per share to be between $3.50 and $4.00. The Zacks Consensus Estimate is pegged at $4.07.
 

United Airlines Holdings Inc Price and EPS Surprise

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

What Our Model Says

Our proven model conclusively predicts an earnings beat for United Airlines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

United Airlines has an Earnings ESP of +5.16% and a Zacks Rank #3.
 

Highlights of Q1

United Airlines reported a first-quarter 2023 loss of 63 cents per share, narrower than the Zacks Consensus Estimate of a loss of 73 cents. In the year-ago quarter, UAL incurred a loss of $4.24 per share.

Operating revenues of $11,429 million beat the Zacks Consensus Estimate of $11,420.9 million. UAL’s revenues increased 51.1% year over year due to upbeat air-travel demand.

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