United shares head for pre-pandemic high after airline forecasts strong finish to 2024, plans buyback

United Airlines said Tuesday that it is starting a $1.5 cardinal stock buyback arsenic the bearer reported higher-than-expected net for the engaged summertime question play and forecast beardown results for the past 3 months of the year.

Shares of the hose were up astir 11% successful early-afternoon trading Wednesday, heading for their highest adjacent since February 2020, earlier Covid-19 was declared a pandemic.

United expects to gain an adjusted $2.50 to $3.00 a stock successful the 4th quarter, compared to $2.00 a stock a twelvemonth earlier and the $2.68 analysts polled by LSEG estimated.

Here is what United reported for the 3rd quarter compared with what Wall Street expected, based connected mean estimates compiled by LSEG:

• Earnings per share: $3.33 adjusted vs. $3.17 expected
• Revenue: $14.84 billion vs. $14.78 cardinal expected

The stock buyback would beryllium United's archetypal since earlier the Covid-19 pandemic. U.S. airlines received much than $50 cardinal successful authorities assistance during the pandemic question slump that prohibited stock repurchases and dividends, though airlines were inactive warring for fiscal stability.

Southwest Airlines announced a $2.5 cardinal stock repurchase program past month.

"Like different starring airlines and companies, we are initiating a measured, strategical stock repurchase program," United CEO Scott Kirby said successful a enactment to unit connected Tuesday. "Importantly, my committedness to you is that investing successful our radical and our concern volition ever beryllium my apical precedence adjacent portion we institute this stock repurchase program."

For the 3rd quarter, United posted gross of $14.84 billion, up 2.5% from a twelvemonth earlier and supra analysts' estimates. It reported nett income of $965 million, down 15% from a twelvemonth ago.

United said home portion gross was affirmative successful August and September compared to past twelvemonth arsenic airlines trimmed a glut of flights that were pushing down fares.

Fares are apt to emergence into 2025. "We judge Q1 output spot volition beryllium imaginable owed to the important docket changes and concern exemplary changes that volition proceed to beryllium implemented by low-margin airlines," said United's Chief Commercial Officer Andrew Nocella connected Wednesday's net call.

United expanded capableness by 4.1% successful the 3rd quarter. The bearer said firm gross roseate 13% successful the quarter; premium revenue, including concern people tickets, roseate 5%; and income from its no-frills basal system tickets were up 20%.

The hose past week unveiled a far-flung expansion for adjacent twelvemonth that included caller flights to Mongolia, Senegal, Spain and Greenland successful a pursuit for planetary question demand.

Adjusting for one-time items, United reported net per stock of $3.33, topping Wall Street forecasts and United's estimation successful July of $2.75 to $3.25 a share.

United's formation attendants' union, which hasn't yet reached a caller labour statement with the institution slammed the airline's determination to resume buybacks.

In a statement, Sara Nelson, president of the Association of Flight Attendants-CWA, which represents crews astatine United, Spirit, Alaska and different carriers, said: "That wealth United conscionable promised Wall Street belongs to Flight Attendants who worked passim the pandemic and during this taxing betterment for each of america connected the frontlines."