United Airlines (UAL.US) has released its financial results for the third quarter of 2024. The company's profit for the third quarter exceeded market expectations, thanks to the growth of its core business and measures to reduce unprofitable capacity. However, the company's profits were still adversely affected by operating costs.

The financial report shows that United Airlines' Q3 revenue was $14.843 billion, a year-on-year increase of 2.5%, better than the analysts' consensus expectation of $14.78 billion. By business segment, passenger revenue was $13.561 billion, a year-on-year increase of 1.6%; cargo revenue was $417 million, a year-on-year increase of 25.2%; other revenue was $865 million, a year-on-year increase of 7.9%.

Operating profit was $1.565 billion, a year-on-year decrease of 10.0%; net profit was $965 million, a year-on-year decrease of 15.1%; diluted earnings per share were $2.90, compared to $3.42 in the same period last year. Adjusted earnings per share were $3.33, better than the analysts' consensus expectation of $3.07, but lower than the $3.65 in the same period last year.

Q3 available seat miles (ASMs) were 81.541 billion miles, a year-on-year increase of 4.1%; passenger revenue per available seat mile (PRASM) was 16.63 cents, a year-on-year decrease of 2.4%; total revenue per available seat mile (TRASM) was 18.20 cents, a year-on-year decrease of 1.6%.

Advertisement

Q3 unit costs increased by 0.1% year-on-year to $16.28, higher than the analysts' consensus expectation of $16.23; unit costs excluding fuel increased by 6.5% year-on-year, to 12.26 cents. The price of aviation fuel was $2.56 per gallon, lower than the $2.95 per gallon in the same period last year.

United Airlines CEO Scott Kirby said, "As the industry reaches an inflection point in this quarter, with the exit of loss-making capacity, revenue trends have improved." In the last few months of this year, low-cost airlines have significantly reduced their flight plans. Airline executives said this helps to reduce oversupply and support higher ticket prices.

The company also announced a $1.5 billion share repurchase plan, of which $500 million will be repurchased in the remaining time of 2024. This is the company's first repurchase plan since it suspended the repurchase program in 2020. The company said, "As we continue to invest and deleverage, we can now add a share repurchase plan. At the same time, our goal is to reduce net leverage to below 2 times in the next few years. We hope this repurchase will be the beginning of a sustained and disciplined capital return, which is determined by our ability to generate more and more free cash flow."

Looking ahead, the company expects adjusted earnings per share for the fourth quarter to be between $2.50 and $3.00, with the midpoint of the forecast range higher than the analysts' consensus expectation of $2.68.