Shares of United Airlines plunge on sour outlook for 4Q profit because of rising fuel prices
By Associated Press, The Associated Press on October 18, 2023.
Shares of United Airlines tumbled more than 7% on Wednesday morning and took the rest of the industry down with them after the carrier gave a gloomy outlook for fourth-quarter profit, which will be reduced by rising jet fuel prices. In addition, United’s revenue could be disappointing the longer that flights to Israel are suspended for the Israel-Hamas war. United reported after the market closed Tuesday that it earned $1.14 billion in the third quarter, beating Wall Street expectations for profit and revenue. Investors, however, focused immediately on the airline’s prediction that fourth-quarter earnings would be between $1.50 and $1.80 per share, well below analysts’ forecast of $2.09 per share. United said whether profit is at the high or low end of that range will depend on whether flights to Tel Aviv resume next month or remain shuttered through year end. “Given the projections that this will be a long war, we are looking at the lower end of the forecast range and assuming no service until at least year-end,” Cowen analyst Helane Becker wrote in a note to clients. Becker called United’s fourth-quarter outlook “bleak and worse than our estimates.” United was flying to Tel Aviv from San Francisco, Washington, and Newark, New Jersey – more service to Israel than offered by Delta Air Lines or American Airlines. All three suspended their service shortly after Hamas militants attacked Israel on Oct. 7. 9-8
