United Airlines Holdings Inc. surprised investors late Tuesday with better-than-expected results, pinning the quarterly beat on a rebound in premium leisure travel, the “continued recovery” of business travel, and the loosening of travel restrictions in some of its international destinations.
United /zigman2/quotes/205037281/composite UAL +5.33% said it earned $473 million, or $1.44 a share, in the quarter, reversing a loss of $1.8 billion, or $6.33 a share, in the third quarter of 2020.
Adjusted for one-time items, including nearly $1.1 billion in government aid, the company lost $1.02 a share in the quarter.
Revenue rose to $7.8 billion, from $2.5 billion a year ago. That compared with sales of $11.4 billion in the third quarter of 2019.
Analysts polled by FactSet expected United to report an adjusted loss of $1.58 a share on revenue of $7.64 billion for the quarter.
“The recovery was delayed by the delta variant, but the United team remains focused on our long-term vision – and not getting sidetracked by near-term volatility,” Chief Executive Scott Kirby said in a statement.
“From the return of business travel and the planned re-opening of Europe and early indications for opening in the Pacific, the headwinds we’ve faced are turning to tailwinds,” he said.
The stock rose more than 2% in the extended session after ending the regular session down 2%.
United plans to increase international capacity by 10% next year, while keeping domestic capacity flat.
Capacity, or how many seats an airline has available for its routes, was down 28% in the quarter compared to third quarter of 2019. The company said it expects capacity to be down about 23% in the fourth quarter as compared to same quarter in 2019.
United said it expects fourth-quarter revenue to be down between 25% and 30% as compared with the fourth quarter 2019. It called for capital expenditures around $3 billion for the full year 2021. For the long-term, it guided for adjusted per-share earnings of around $20 by 2026.
Delta Air Lines Inc. /zigman2/quotes/200327741/composite DAL +7.49% last week posted its first adjusted pandemic profit , but the stock fell as investors worried about the rising costs of fuel, wages and maintenance, and as uncertainty swirled around the end-of-the-year travel season.
Shares of United have gained 7% so far this year, compared with gains of around 20% for the S&P 500 Index /zigman2/quotes/210599714/realtime SPX +1.64% and of 3.5% for the U.S. Global Jets ETF /zigman2/quotes/207744796/composite JETS +5.16% .