United Airlines posts biggest annual loss since 2005, warns difficult months ahead as pandemic drags on

A Boeing 787 Dreamliner operated by United Airlines takes off from Los Angeles International Airport.

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United Airlines on Wednesday posted a fourth-quarter loss and warned gross sales would proceed to undergo within the early a part of 2021 as the coronavirus pandemic drags on.

Here’s how United carried out within the quarter, in contrast with what Wall Street anticipated, based mostly on common estimates compiled by Refinitiv:

  • Adjusted earnings per share: a loss of $7 versus an anticipated loss of $6.60 a share.
  • Revenue: $3.41 billion versus anticipated $3.44 billion in income.

United’s fourth-quarter income fell 69% from a 12 months earlier to $3.41 billion, beneath analysts’ estimates of $3.44 billion. Its web loss of $1.9 billion within the quarter compares with a $641 million revenue a 12 months earlier.

The provider’s full 12 months web loss of $7.07 billion was the biggest since 2005.

The Chicago-based airline reported an adjusted loss of $7 a share, in contrast with estimates for a loss of $6.60 per share. It burned about $33 million a day on common within the quarter, together with debt and severance funds. Core every day money burn, which strips these objects out, averaged $19 million within the fourth quarter, $5 million lower than the third quarter.

The provider is not anticipating a fast turnaround early this 12 months. First-quarter income will doubtless are available in 65% to 70% beneath 2019 ranges, the airline mentioned. It estimated capability within the first three months of 2021 will likely be at the least 51% beneath the identical interval of 2019, echoing a comparable outlook from American Airlines.

The provider referred to as 2021 a “transition year” and mentioned it expects to exceed its 2019 margins by 2023.

United’s cargo enterprise once more proved to be a shiny spot within the pandemic with income leaping 77% within the quarter to $560 million. That unit contributed 16% of its fourth-quarter income, up from only a 3% a 12 months earlier. Passenger airways final 12 months raced to beef up these enterprise as prospects confronted a worldwide crunch in air freight capability.

United’s shares had been down 1.7% in after-hours buying and selling following the report.

Airline executives have mentioned widespread availability of coronavirus vaccines will gas a restoration in air journey. But the vaccine rollout has been gradual and chaotic, marked by a scarcity of doses.

United executives will maintain a name to debate its income and outlook at 10:30 a.m. ET on Thursday.

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