TLDR
- United Airlines reported Q2 earnings of $3.87 per share, beating analyst expectations of $3.81 but shares fell 2.8% in premarket trading
- The airline lowered its full-year profit outlook to $9-11 per share from previous guidance of $11.50-13.50 per share
- Q3 profit forecast of $2.25-2.75 per share came in below Wall Street estimates of $2.60 per share
- Travel demand has accelerated with a 6 percentage point increase overall and double-digit growth in business bookings
- Newark airport operational issues continue to impact margins, causing a 90 basis point drag in Q3
United Airlines delivered a solid earnings beat for the second quarter but investors weren’t impressed with the company’s profit outlook for the rest of the year. The stock dropped 2.8% in premarket trading Wednesday despite beating earnings expectations.
The airline reported adjusted earnings of $3.87 per share for the June quarter. This topped both the FactSet consensus estimate of $3.81 and Goldman Sachs’ estimate of $3.60.
United Airlines, $UAL, Q2-25. Results:
📊 Adj. EPS: $3.87 🔴
💰 Revenue: $15.2B 🔴
📈 Net Income: $1.0B
🔎 Strong demand rebound in July and improved on-time performance drive confidence for a solid 2H 2025 pic.twitter.com/Bsa5BEltPV— EarningsTime (@Earnings_Time) July 16, 2025
CEO Scott Kirby struck an optimistic tone about recent trends. “The world is less uncertain today than it was during the first six months of 2025 and that gives us confidence about a strong finish to the year,” he said.
United reported strong momentum in travel demand since early July. The airline saw a 6 percentage point acceleration in overall travel demand and double-digit growth in business bookings during the third quarter compared to the previous quarter.
Revised Guidance Disappoints
Despite the positive demand trends, United lowered its full-year profit expectations. The company now expects adjusted earnings between $9 and $11 per share for 2025. This represents a reduction from previous guidance of $11.50 to $13.50 per share.
The new guidance midpoint aligns with analyst expectations of $10.04 per share. However, investors had hoped for stronger projections given the improving demand environment.
For the third quarter, United forecasts earnings between $2.25 and $2.75 per share. The midpoint of $2.50 falls short of Wall Street’s average estimate of $2.60 per share.
Newark Airport Creates Headwinds
Operational constraints at Newark airport continue to weigh on United’s performance. The New Jersey hub represents one of the airline’s largest operations and among the busiest airports in the country.
Newark issues caused a 120 basis point drag on second quarter margins. The airline expects approximately 90 basis points of impact in the third quarter.
United anticipates no impact from Newark problems in the December quarter. The operational challenges have forced the airline to adjust capacity and routes at the critical hub.
Goldman Sachs maintained its Buy rating on United stock with a $92 price target. The investment bank noted that United’s earnings beat came primarily from lower-than-expected non-fuel operating costs.
Revenue came in slightly below expectations, partially offsetting the cost benefits. The airline continues to face weak pricing power across all geographic markets.
United’s yield, or average revenue per paying passenger, declined in all regions during the second quarter. The weakness was most pronounced in the domestic U.S. market.
Industry executives report that travel demand has stabilized after earlier uncertainty. However, passenger traffic remains below year-ago levels, putting pressure on airfares.
Delta Air Lines reinstated its full-year profit outlook last week, reflecting similar improvements in booking trends. Both airlines expect capacity cuts industry-wide to support higher fares in the second half of the year.
United took the unusual step in April of providing two different earnings forecasts. Trade tensions had created uncertainty that made business forecasting more difficult for carriers.
The airline will discuss its financial results on a call with analysts and investors Thursday morning. Management will likely provide more details about demand trends and operational improvements at Newark.
United currently trades at $88.47 with a market cap of $28.89 billion and maintains a low P/E ratio of 7.95 according to recent data.
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