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What to expect when United Airlines (UAL) reports Q2 2024 financial results

United Airlines (NASDAQ: UAL) stock was trading in the red at midday Wednesday. The stock has gained 11% over the past three months. The airline is set to report second-quarter 2024 results on Wednesday, July 17, after markets close. Here’s what to expect from the earnings report:

Income

Analysts are forecasting revenue of $15.1 billion for United in the second quarter of 2024, which would represent growth of more than 6% year over year. In the first quarter of 2024, operating income rose nearly 10% year over year to $12.5 billion.

Profits

United is forecasting adjusted earnings per share of $3.75-$4.25 for the second quarter of 2024. The consensus estimate is $3.99, which compares to adjusted earnings per share of $5.03 reported in the same period a year ago. The company reported an adjusted loss of $0.15 per share for the first quarter of 2024.

Points to note

United’s second-quarter results are expected to benefit from strong demand for air travel, particularly strong summer traffic, as well as continued improvement in business travel. In the first quarter, United’s passenger revenue increased 10% year over year, while unit revenue increased 0.6%. Passenger revenue per available mile (PRASM) increased 1%. Managed business travel increased 14%.

In the latest quarter, the company saw domestic PRASM growth, while international PRASM declined. Latin America PRASM fell by almost 13%. The Atlantic region saw PRASM growth, while the Pacific region saw PRASM decline.

On its latest quarterly earnings call, United said it saw strong domestic and Atlantic demand in the second quarter with positive PRASM results, tempered by the Pacific, where it expects a negative year-over-year result. The company also expects Latin America to have a materially negative year-over-year PRASM result in the second quarter.

Challenges posed by Boeing’s fleet weighed on United’s profitability last quarter. Uncertainty over the Boeing MAX grounding and delays in deliveries of United’s planes put pressure on spending, and continued capacity reductions due to delivery delays are likely to temporarily pressure costs through the year. The impact is likely to continue into the second quarter.

At the same time, United’s efforts to improve customers’ travel experiences by providing assistance through AI-powered tools and similar capabilities, as well as plans to expand its route offerings, will likely prove beneficial.