United Airlines Reports Narrower-Than-Expected Q3 Loss; Shares Rise 2.3%

Shares of air transportation services provider United Airlines Holdings (UAL) gained 2.3% in extended trade on Tuesday after the company reported smaller-than-expected loss for the third quarter of 2021.

Based out of Illinois, United Airlines offers cargo and passenger transportation services in North America, the Pacific, the Atlantic and Latin America.

The company reported a loss of $1.02 per share, narrower than the year-ago loss of $8.16 per share and the Street’s loss estimate of $1.29 per share.

Total operating revenue amounted to $7.75 billion, significantly higher than $2.5 billion reported in the third quarter of 2020. However, the figure fell short of analysts’ expectations of $7.85 billion.

The CEO of United Airlines, Scott Kirby, said, “From the return of business travel and the planned re-opening of Europe and early indications for opening in the Pacific, the headwinds we’ve faced are turning to tailwinds, and we believe that United is better positioned to lead the recovery than any airline in the world.”

“Our recovery will be supported by investments in technology and other efficiencies that will give our employees the tools they need to take great care of our customers – and keep costs under control,” Kirby added.

Meanwhile, for the fourth quarter, the company expects capacity to be nearly 23% lower than the fourth quarter of 2019. Total revenue is expected to be 25% to 30% lower than the fourth quarter of 2019. (See Insiders’ Hot Stocks on TipRanks)

Notably, the company plans to increase its international capacity by 10% next year, driven by lifting of travel restrictions in key Pacific markets, continued recovery of business travel, reopening of European borders and rebound in premium leisure travel.

On October 7, Jefferies (JEF) analyst Sheila Kahyaoglu maintained a Hold rating on the stock with a price target of $50 (8.2% upside potential). The analyst expects the company to report a loss of $1.34 per share in the fourth quarter.

Overall, the stock has a Moderate Buy consensus rating based on 6 Buys, 6 Holds and 2 Sells. The average United Airlines Holdings price target of $58.42 implies 26.4% upside potential. Shares have gained 28.2% over the past year.