United Airlines nasdaq Ual Stock Soars on Strong Q1 Results and Upbeat Outlook

United Airlines (NASDAQ: UAL) Stock Soars on Strong Q1 Results and Upbeat Outlook

United Airlines (NASDAQ: UAL) stock surged over 17% in the intraday trading Wednesday following the release of better-than-expected first-quarter results and a positive earnings outlook for the current quarter.

United Airlines (UAL) reported better-than-expected financial results for the first quarter, posting an adjusted loss of 15 cents per share compared to analysts’ expectations of a wider loss of 57 cents per share. 

The Chicago-based carrier also beat revenue forecasts, with revenue reaching $12.54B. This figure marked nearly a 10% increase from the previous year and surpassed analysts’ expectations of $12.45B.

The airline revealed that the temporary grounding of its Max 9 jets in January, following an inflight door plug blowout, cost it approximately $200 million. The company stated that if the planes had not been out of service, it would have turned a profit in the quarter.

Q2 Guidance

United Airlines provided bullish guidance for the current quarter, projecting earnings between $3.75 and $4.25 per share. The midpoint of this range easily beat analysts’ expectations of $3.76 per share. The airline also reaffirmed its full-year 2024 earnings forecast of between $9 and $11 per share.

In response to regulatory constraints on Boeing’s production limits after safety-related incidents, United Airlines adjusted its fleet plan. The company now expects to take delivery of 61 narrow-body planes this year, down from the previously forecasted 101. To navigate the uncertainty surrounding long-term plane deliveries, United plans to lease 35 Airbus A321neos in 2026 and 2027 from Boeing’s French rival Airbus (EADSY). The company also intends to convert some of its Max 10 aircraft orders to Max 9 planes from 2025 through 2027.

CEO Scott Kirby stated in the earnings report,

“We’ve adjusted our fleet plan to better reflect the reality of what the manufacturers can deliver.”

The results of the airline surpassing expectations have given investors a sigh of relief, according to Citi analysts, following a period of difficulties. The investment bank analysts’ note, cited by MarketWatch, suggests that the shares of United, currently in an oversold state, could see some relief following these results and guide.

United Airlines (NASDAQ: UAL) Stock Price Action

At the time of publication, UAL stock is trading at $48.74, reflecting a 17.45% increase compared to the previous trading session. Traders have exchanged 67,149,583 (67.14 million) shares, surpassing the average daily trading volume of 8.89 million.