Transportation

What to Expect When United Continental Reports After the Close

Chris Lange

Published: October 18, 2017 2:00 pm

Last Updated: January 12, 2020 7:03 am

United Continental Holdings Inc. (NYSE: UAL) is set to report its most recent quarterly results after the markets close on Wednesday. Although airlines in general have not had that bad a year, United takes the cake for the worst performing stock of the group. Most of this drop came after the company reported its second-quarter earnings in July, so perhaps a solid third-quarter report could put it back in line.

The consensus estimates are $2.12 in earnings per share and $9.87 billion in revenue. The third quarter of last year had earnings of $3.11 in per share and $9.91 billion in revenue.

The company released its September traffic report about a week ago, and although the numbers were mixed compared with the same period last year, there was a positive response among investors.

September 2017 consolidated traffic (revenue passenger miles) decreased 1.6% and consolidated capacity (available seat miles) increased 1.7% from September 2016. United’s September 2017 consolidated load factor decreased 2.7 points compared to last year.

Looking at Delta Airlines most recent earnings and traffic reports, the numbers and response might be a bellwether for United’s earnings. Overall investors responded well to these and have sent shares about 10% higher since the beginning of October.

This could be the turnaround in 2017 that United is looking for.

Excluding Wednesday’s move, United Continental has underperformed the broad markets, with the stock down about 7% year to date. Over the past 52 weeks, the stock is up about 27%.

Ahead of the earnings report, a few analysts weighed in on the major airline:

• Cowen has a Market Perform rating with a $70 price target.
• Merrill Lynch has a Buy rating with an $84 price target.
• Barclays has a Buy rating with an $80 price target.
• Macquarie has a Neutral rating with a $64 price target.
• Stifel has a Buy rating with a $110 price target.
• Raymond James has a Market Perform rating.
• JPMorgan has a Neutral rating with a $68 price target.
• Citigroup has a Neutral rating with a $68 price target.
• Stephens has an Equal Weight rating with a $65 price target.

Shares of United Continental were last seen up about 1% at $68.33, with a consensus analyst price target of $75.00 and a 52-week range of $52.21 to $83.04.