Boosted Revenue Soars: An In-depth Look at United Airlines (UAL) 3Q 2023 Earnings

United Airlines said that increased jet fuel costs and the suspension of flights to Tel Aviv during the Israel-Hamas war will impact its profitability in the final quarter of this year.

For the current quarter, the Chicago-based carrier expects adjusted earnings ranging from $1.50 to $1.80 per share, which is lower than analysts’ forecast of $2.06.

Compared to its forecast in July of earning between $11 and $12 per share in the fourth quarter, United now anticipates adjusted earnings between $9.55 and $9.85 per share. This revision is due to the rise in jet-fuel prices, which have increased by nearly 25% since the beginning of summer at major U.S. airports.

United, along with other U.S. and international airlines, temporarily halted flights to Israel earlier this month. United was the leading U.S. airline with service to Israel from Washington D.C., Newark, New Jersey, and San Francisco.

This disruption in service comes after a strong summer for air travel, with international revenue surpassing domestic ticket sales. As a result, major global carriers like United and Delta are in a more favorable position compared to discount airlines like Spirit, which focus mainly on U.S. cities and are expecting losses.

Here is how United’s third-quarter results compare to Wall Street expectations:

• Adjusted earnings per share: $3.65, exceeding the expected $3.35
• Total revenue: $14.48 billion, slightly higher than the expected $14.44 billion

In the third quarter, United reported a net income of $1.14 billion on $14.48 billion in revenue, slightly surpassing Wall Street’s estimates. Adjusting for one-time items, United’s per-share earnings were $3.65.

The carrier will host a call with analysts and media at 10:30 a.m. ET on Wednesday to address questions regarding fourth-quarter demand and strategies for managing rising costs.