Shares of United Airlines (UAL) are up 6% after the carrier issued stronger-than-expected guidance for the year ahead.
Chicago-based United, which is the fourth largest airline in America, reported earnings per share of $2 U.S. a share, and a 10% increase in revenue to $13.60 billion U.S. for the fourth and final quarter of 2023.
Those results beat the consensus forecasts of analysts who expected a profit of $1.70 U.S. a share and revenue of $13.55 billion U.S.
United attributed the strong Q4 results to robust air travel during the year-end holidays.
However, United forecast a loss for the current first-quarter of 2024 because regulators have grounded the Boeing (BA) 737 MAX 9 airplanes that the carrier uses.
United Airlines said that it expects a loss of $0.35 U.S. to $0.85 U.S. a share in the current quarter.
United is one of only two major U.S. airlines, along with Alaska Air (ALK), that operate Boeing MAX 9 aircraft that have been grounded for more than two weeks due to safety concerns.
In its earnings report, United said that it has canceled 11% of its scheduled flights since the MAX 9 grounding started.
Despite the downbeat forecast for this year’s first quarter, United said it expects a full-year 2024 profit of $9 U.S. to $11 U.S. per share.
The full-year guidance is better than the $9.48 U.S. a share expected by analysts who cover the company.
Investors appear to be focused on United’ full-year earnings guidance rather than expectations for Q1, sending its stock higher as a result.
Prior to today (Jan. 23), the stock of United Airlines had declined 22% over the last 12 months to trade at $38.45 U.S. per share.
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