{"id":48233,"date":"2017-01-12T11:40:08","date_gmt":"2017-01-12T17:40:08","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=48233"},"modified":"2017-01-12T12:51:58","modified_gmt":"2017-01-12T18:51:58","slug":"united-expects-stronger-fourth-quarter-earnings","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/united-expects-stronger-fourth-quarter-earnings\/","title":{"rendered":"United expects stronger fourth-quarter revenue, shares rise"},"content":{"rendered":"

By Yemeng Yang<\/strong><\/p>\n

Days after two analysts downgraded United Continental Holdings Inc., the Chicago-based carrier bolstered investors\u2019 confidence by raising revenue projections for the quarter and year just ended.<\/p>\n

Shares of United rose $1.32 or 1.8 percent to $74.98 Wednesday, after a 2.5 percent increase in after-hours trading Tuesday when the guidance was released.<\/p>\n

<\/p>\n

Consolidated passenger revenue per available seat mile in the fourth quarter is now expected to be 12.39 cents to 12.45 cents, down 1.25 percent to 1.75 percent from a year ago in the updated guidance, called an \u201cinvestor update.\u201d It was previously projected to decrease 4 percent to 6 percent for the quarter.<\/p>\n

The company said stronger business demand in the two weeks prior to Christmas and leisure demand during the holiday season contributed to a better passenger unit revenue forecast.<\/p>\n

Consolidated traffic, an important metric of total passenger miles, increased 1.7 percent and 2.6 percent in November and December respectively from a year earlier. Bookings and yields were stronger than expected.<\/p>\n

\"Source:
Source: United Continental Holdings Inc.
United\u2019s consolidated traffic in the full fiscal year 2016 was up 2.3 percent. (Yemeng Yang\/MEDILL)<\/figcaption><\/figure>\n

Owning to improved passenger unit revenue, United forecasted pre-tax margin of 9.25 percent to 9.75 percent, up from prior guidance of 5 percent to 7 percent.<\/p>\n

Non-fuel unit cost was expected to increase 4 percent to 4.25 percent, down from prior projections of 4.75 percent to 5.75 percent, impacted by newly-ratified labor agreements.<\/p>\n

\u201cOverall, the updated guidance was strong and should result in near-term estimates being revised higher,\u201d said Helane Becker, an analyst at Cowen & Co., in a research note.<\/p>\n

Becker increased her estimate of United\u2019s earnings per share for the fourth quarter to $1.76 from the prior estimate of $1.43 to reflect the improved guidance.<\/p>\n

Earlier this month, Becker downgraded United to market perform from outperform because of risks that airlines are vulnerable to, including fuel and labor issues.<\/p>\n

Morgan Stanley’s Rajeev Lalwani also downgraded United, to equal weight from overweight.<\/p>\n

“We acknowledge the excellent job the new management team has done in positioning the company as more of a leader amongst peers and turning investor sentiment,” Lalwani wrote in a research note. “Nonetheless, we believe scope for continued outperformance relative to peers may be limited from here.”<\/p>\n

United will release its fourth-quarter and annual earnings on Jan. 18.<\/p>\n

Photo at top: A United airplane waits at Chicago O’Hare International Airport.(Yemeng Yang\/MEDILL)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Yemeng Yang Days after two analysts downgraded United Continental Holdings Inc., the Chicago-based carrier bolstered investors\u2019 confidence by raising revenue projections for the quarter and year just ended. Shares of United rose $1.32 or 1.8 percent to $74.98 Wednesday, after a 2.5 percent increase in after-hours trading Tuesday when the guidance was released.<\/p>\n","protected":false},"author":346,"featured_media":48246,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,3516],"tags":[192],"class_list":["post-48233","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-winter-2017","tag-promo"],"yoast_head":"\nUnited expects stronger fourth-quarter revenue, shares rise - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/united-expects-stronger-fourth-quarter-earnings\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"United expects stronger fourth-quarter revenue, shares rise - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Yemeng Yang Days after two analysts downgraded United Continental Holdings Inc., the Chicago-based carrier bolstered investors\u2019 confidence by raising revenue projections for the quarter and year just ended. 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