Shares of United Airlines Holdings Inc UAL have been on a downward slide Tuesday after the company filed an 8-K with the SEC, lowering its first-quarter guidance.
What Happened: United cut its adjusted EPS outlook to a loss of between 60 cents and $1, compared to prior guidance of 50 cents to $1 and against a consensus estimate of 68 cents.
CEO Scott Kirby admitted to missing the guidance for the first quarter, stating that Unitd had a bad forecast and owning up to the mistake in a presentation with JPMorgan Chase on Tuesday.
Kirby said that while the company missed its first-quarter revenue forecast, the bigger picture is the outlook for United Airlines looks strong.
Revenue passenger miles (RPM) for May and June are well above where they were in March, indicating that the revenue per available seat mile (RASM) will be better than expected, the CEO said.
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The company is hoping to hit its mid-teen guidance for revenue growth and is confident about its long-term outlook, he said.
Kirby acknowledged the disappointment of missing guidance but said he is confident about the second quarter and beyond.
In the Q&A session, Kirby addressed the challenges of the pandemic and the airline industry's structural changes. The pandemic was not a permanent structural change, but the world is different now and airlines must adapt to the situation, the CEO said.
The industry has become saturated, and capacity constraints such as pilot shortages have become a reality, he said.
Kirby also commented on the challenges of airline management teams figuring out how to run their businesses in this new environment, saying that most teams are still running their airlines with the presumption that they can get back to 2019.
UAL Price Action: Shares of United Airlines are trading 4.69% lower to $46.54, according to data from Benzinga Pro.
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