Why United Airlines Shares Are Falling Today

  • United Airlines Holdings Inc UAL shares have been sliding since the company filed an 8-K with the SEC, providing an update on its 1Q23 guidance.
  • UAL cut its adjusted EPS outlook to $(0.60)-$(1.00), compared to prior guidance of $0.50-$1.00 versus a consensus estimate of $0.68, and adjusted pre-tax margin of (2%)-(4%), compared to prior ~3%.
  • It now sees capacity (vs. 2022) at ~23% (prior ~20%) and expects total operating revenue to increase ~51% (prior 50%).
  • Total revenue per available seat mile (TRASM) of 22%-23% prior ~25%. Adjusted cost or operating expense per available seat mile (CASM-ex) of Flat-1% prior (3%)-(4%).
  • UAL expects an Average aircraft fuel price per gallon of $3.31-$3.41 prior to $3.19.
  • The company continues to expect an FY23 adjusted pre-tax margin of ~9% and adjusted EPS of $10 to $12 versus the consensus of $8.7.
  • United stated that it has decided it is reasonable to incur expenses in the first quarter of 2023 related to a potential new collective bargaining agreement with employees represented by the Air Line Pilots Association. 
  • Price Action: UAL shares are trading lower by 2.89% at $47.42 premarket on Tuesday.
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