United Airlines shares rose Tuesday after the third-largest U.S. carrier topped second-quarter profit expectations and raised its outlook for the year.
Revenues for the quarter ended in June came in at $10.78 billion, slightly higher than Wall Street estimates of $10.72 billion, the company said in releasing its earnings after the markets closed.
United’s per-share profits on an adjusted basis came in at $3.23 a share, above the $3.07 cents analysts polled by Thomson Reuters had expected.
Profit slid by almost 17 percent from the same quarter last year as higher fuel costs dragged on the bottom line. The company’s adjusted EPS was boosted, in part, because fewer shares were outstanding during the quarter. United repurchased $407 million of its common shares in the second quarter, the company said.
“We delivered great financial results and strong operational performance in the second quarter despite the significant headwind of higher fuel prices,” CEO Oscar Munoz said in a statement. Munoz had come under pressure earlier this year after the airline launched an aggressive growth plan, which worried investors that the extra supply of seats in the market would suppress airfares. The revenue per each seat United flew a mile in the last quarter, a key industry metric, rose 2.8 percent in the second quarter and it expects that growth to climb by as much as 6 percent in the three months ending in September.
United’s costs surged 43 percent in the second quarter and weighed on the carrier’s bottom line. Net income in the three months ended in June was $684 million, down nearly 17 percent.
