United Airlines Raises Profit Forecast, Shares Rally

Shares of United Airlines Holdings Inc. (UAL) experienced a rally after hours on Wednesday following the air carrier’s more optimistic full-year profit outlook. This positive outlook comes as the travel industry faces challenges due to nationwide service issues.

Raised Profit Forecast

United raised its per-share profit forecast for the full year to a range of $11 to $12, up from the previous range of $10 to $12. This new forecast exceeds FactSet’s expectations of $9.78. Additionally, for the third quarter, United anticipates reporting adjusted earnings per share of $3.85 to $4.35, surpassing FactSet’s expectations of $3.76.

Sales Growth Forecast

The airline also forecasts a sales growth rate of 10% to 13%, which is higher than the approximately 9% predicted by FactSet. As a result of these positive projections, shares rose by 2.5% after hours.

Strong Financial Performance

United reported a net income of $1.1 billion, or $3.24 per share, in comparison to $329 million, or $1 per share, in the same quarter last year. Furthermore, revenue increased to $14.18 billion, up from $12.11 billion in the prior-year quarter. After adjusting for special charges and debt extinguishment, United earned $5.03 per share.

Analyst Expectations

Analysts polled by FactSet had expected United to report adjusted earnings per share of $4.03 on sales of $13.9 billion. However, United’s actual results and outlook surpassed these projections. The company believes its initiatives to enhance the airline and improve flight-connectivity at mid-continent airports are yielding positive results.

In conclusion, United Airlines’ raised profit forecast and strong financial performance have sparked a rally in its shares. The airline’s proactive measures to address service challenges and enhance its operations have contributed to this optimism in the travel industry.

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