By Senad Karaahmetovic
United Airlines (NASDAQ:UAL) shares are trading about 3% higher in pre-open Wednesday after the company reported better-than-expected Q4 results and raised its guidance.
Earnings per share came in at $2.46 on revenue of $12.4 billion, beating the consensus of $2.11 on revenue of $12.23B. Revenue increased by 51% year-over-year (YoY) on strong recovery and demand for travel.
For this quarter, United expects EPS in the range of $0.50-$1.00, a large beat compared to the consensus of $0.25. Revenue is seen rising about 50% YoY. For the full 2023, UAL sees EPS at $11 (up or down $1), crushing the consensus of $6.54. The company expects revenue growth to be in the high teens in 2023.
Bernstein said UAL delivered strong results, even when measured against the brokerage's “bullish” estimates.
“United is leaning into international growth in 2023, and leveraging investments made during pandemic to realize a recovery in earnings power that is way ahead of market expectations. While the market will debate whether it's a good idea to trade the guide, investing in a quicker than expected recovery in earnings power at this valuation continues to look like a good idea. Reiterate Outperform,” they wrote in a note.
Deutsche Bank analysts added:
“We think the fact that United managed through the pandemic with the majority of its widebody fleet intact (United's widebody fleet of 220 aircraft compares with American and Delta's estimated 122 and 152 units, respectively) means the company is best positioned to capitalize on the reopening of previously served markets as well as pursue new opportunities for growth, particularly long-haul routes,” they said in a note.