United Airlines Stock Climbs After Topping Q1 Estimates, Issuing Upbeat Guidance

Monitor This Key Chart Level

Key Takeaways

• United Airlines shares jumped more than 5% in extended trading Tuesday evening after the airline topped analysts’ quarterly forecasts and issued better-than-expected current-quarter earnings guidance.
• CEO Scott Kirby said the carrier has adjusted its fleet to better reflect deliveries from manufacturers.
• Monitor if the United Airlines share price can close above the top trendline of a rising wedge pattern around $43.85.

United Airlines (UAL) climbed more than 5% in extended trading on Tuesday after the airline topped Wall Street’s quarterly expectations and issued better-than-expected current-quarter earnings guidance, despite slashing its aircraft deliveries forecast from troubled airplane maker Boeing (BA).

For the three months ending March 31, the Chicago-based carrier posted an adjusted loss of 15 cents per share, narrower than 57-cents-a-share loss expected by analysts. Revenue in the period of $12.54 billion jumped nearly 10% from a year earlier and topped the Street expectation of $12.45 billion.

United said the temporary grounding of Max 9 jets in January following an inflight door plug blowout involving the aircraft type cost it around $200 million, adding that it would have generated a profit in the quarter had the planes not been out of service.

Looking ahead, the airline guided current-quarter earnings of between $3.75 and $4.25 per share, with the midpoint of that range easily surpassing analysts’ modeling of $3.76 a share. The carrier also reiterated its full-year 2024 earnings forecast of between $9 and $11 a share.

The company said it now expects to take delivery of 61 narrow-body planes this year, down from the 101 it had forecast in January after regulators capped Boeing’s production limits after a string of safety-related incidents. To help manage uncertain long-term plane deliveries, United plans to lease 35 Airbus A321neos in 2026 and 2027 from Boeing’s French rival Airbus (EADSY). It will also convert a portion of Max 10 aircraft orders to Max 9 planes from 2025 through 2027. “We’ve adjusted our fleet plan to better reflect the reality of what the manufacturers are able to deliver,” CEO Scott Kirby said in the company’s earning’s statement.

Analysts at Citi said the airline’s better-than-expected results provided investors with relief after recent challenges. “Overall, these results and guide could bring at least some relief to what we would characterize as the oversold situation in United’s shares,” analysts at the investment bank wrote in a note cited by MarketWatch on Tuesday.

Since finding a bottom just below $35 in late October last year, United’s share price traded within a rising wedge for five months before breaking below the pattern earlier this month. Amid Wednesday’s projected earnings-driven rally, investors should monitor if the stock can close above the wedge’s lower trendline, currently sitting around $43.85. A close above this important technical level increases the likelihood of a bear trap, which could see short sellers squeezed, potentially leading to further upside in the share price.

United shares gained 5.2% to $43.65 in after-hours trading Tuesday.

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