United Airlines Q1 2022 Earnings Report Recap

United Airlines missed on earnings and on revenue

Key Takeaways

  • United Airlines' load factor came in below analyst predictions, although it reached the highest level in two years.
  • Load factor measures the percentage of an airline's seating capacity that is filled with paying passengers.
  • Travel demand is roaring back after its rebound was slowed in recent quarters by the spread of the Delta and Omicron variants.
United Airlines Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Miss -$4.24 -$4.18
Revenue Miss $7.6B $7.7B
Load Factor Miss 72.6% 77.0%

Source: Predictions based on analysts’ consensus from Visible Alpha

United Airlines (UAL) Financial Results: Analysis

United Airlines Holdings, Inc. (UAL) reported Q1 FY 2022 earnings results that missed analysts' consensus estimates. The company reported an adjusted loss per share that was wider than analysts had predicted. However, it was a significant improvement from the adjusted loss per share of $7.50 reported in the year-ago quarter. United's revenue also missed expectations but was up 134.9% year over year (YOY). However, revenue was still below levels reached prior to the COVID-19 pandemic. The airline's load factor came in below analyst forecasts.

The company's shares rose as much as 8% in extended trading on Wednesday. Over the past year, United Airlines' shares have provided a total return of -7.5%, below the S&P 500's total return of 7.9%.

UAL Load Factor

United Airlines' load factor rose significantly from the year-ago quarter's level of 56.8%, which was depressed due to the shock to travel demand caused by the pandemic. Load factor is a key metric used in the airline industry to indicate the percentage of a carrier's available seats that are filled with paying passengers. Because the costs of sending an aircraft into flight are relatively the same whether there are 50 people aboard or 100, airlines have a strong incentive to fill as many seats as possible by selling more tickets. Higher load factors mean that an airline's fixed costs are spread across a greater number of passengers, making the airline more profitable. 

The pandemic led to a reduction in air travel, leaving airlines with high fixed costs amid falling load factors and revenues, the combination of which has caused steep losses. Successive waves of the pandemic, including those caused by the Delta and Omicron variants of the coronavirus, have slowed the rebound in travel demand in recent quarters. But travel demand is surging again as some airlines are reporting the highest ticket sales in their history. United Airlines said that it was seeing business travel quickly rebound and that it expects to see ongoing improvement in international travel.

The company said that it expects to return to profitability in the second quarter. It also expects the second strongest second quarter of revenue in its history.

United Airlines' next earnings report (for Q2 FY 2022) is expected to be released on July 18, 2022.

Article Sources

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  1. United Airlines Holdings Inc. "United Airlines Announces Financial Results - Expects Highest Quarterly Revenue in Company History in Q2."

  2. Visible Alpha. "Financial Data."

  3. TradingView. "Price Chart: UAL and S&P 500."

  4. Reuters. "U.S. Airline Demand, Costs Soaring as Earnings Kick Off."

  5. Yahoo! Finance. "Earnings Calendar: UAL."

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