United Airlines Tops Q2 Earnings Estimates on Low Fuel Cost

Core Insights - United Airlines Holdings, Inc. (UAL) reported mixed second-quarter 2025 results, with earnings surpassing estimates but revenues falling short [1][11] - Adjusted earnings per share (EPS) for Q2 2025 was $3.87, beating the Zacks Consensus Estimate by a penny but declining 6.5% year-over-year [1][11] - Operating revenues reached $15.2 billion, missing the Zacks Consensus Estimate of $15.4 billion, but increased 1.7% year-over-year [2][11] Revenue Breakdown - Passenger revenues, which constituted 90.8% of total revenues, rose 1.1% year-over-year to $13.8 billion [2] - Cargo revenues increased by 3.8% year-over-year to $430 million, while revenues from other sources grew 8.8% year-over-year to $970 million [2][3] - Premium cabin revenues saw a 5.6% year-over-year increase, and loyalty revenues rose by 8.7% [3] Operational Performance - Airline traffic, measured in revenue passenger miles, grew by 4.5%, while capacity, measured in available seat miles, expanded by 5.9% [6] - The consolidated load factor decreased by 1.1 percentage points year-over-year to 83.1% due to capacity growth outpacing traffic improvement [6][11] - Consolidated passenger revenue per available seat mile fell by 4.5% year-over-year, and total revenue per available seat mile decreased by 4% [7] Cost and Expenses - Operating expenses increased by 6.5% year-over-year to $13.9 billion [8] - Consolidated unit cost per available seat mile, excluding certain expenses, rose by 2.2% year-over-year to 12.36 cents [8] Financial Position - UAL ended Q2 2025 with cash and cash equivalents of $9.35 billion, slightly down from $9.37 billion in the previous quarter [9] - Long-term debt and financial liabilities decreased to $20.8 billion from $24.4 billion at the end of Q1 2025 [9] - The company repurchased $0.2 billion of shares in Q2 2025 and generated $1.13 billion in free cash flow [9] Future Outlook - UAL anticipates a rebound in demand in the second half of 2025, with an updated full-year EPS guidance of $9.00 to $11.00 [12][13] - For Q3 2025, UAL expects adjusted EPS between $2.25 and $2.75, with the Zacks Consensus Estimate at $2.70 [12] - The company expects adjusted capital expenditures to be less than $6.5 billion [13]