On Tuesday after closure of the market, United Airlines reported Wall Street expectation beating results for fourth quarter. The airline’s stronger profits and revenue surged the United Continental Holdings shares on Wednesday which saw more than 7 percent boost in morning trading. The airline also issued a positive earnings growth outlook in 2019.
Airline measure their unit revenue on the basis of revenue generated per seat per mile flied and an estimate of airfares, and United Airline posted its unit revenue in the fourth quarter rise by 5 percent from a year ago unit revenue, which touched the higher end of its estimate for the same. Each region of the airline where it operates came up with increased revenue while domestic revenue showed the fastest growth rate of 12 percent.
The current results indicates a sharp turnaround for the airline as last year United CEO Oscar Munoz have to made rigorous efforts in convincing the investors for company’s plan of expanding at the rate of 6 percent a year and that strategy will be paying off now.
The company has been expecting a flat 3 percent rise in its unit revenue in first quarter of 2019 from the unit revenue generated in same quarter last year.
United Continental Holdings the parent company of United Airline said that average of analysts at Refinitiv were expecting the company to be generating a revenue of $10.34 in last three month of 2018 but the company beat the expectation by generating revenue of $10.49 billion in the same period.
However the net income, due to higher operating costs, fell to $462 million which is 20 percent less from net income a year ago as, in fourth quarter, United has to pay more for fuel bill which was 27 percent higher than the fuel bill a year earlier.