United Airlines (NASDAQ:UAL) will report its third quarter 2024 results on Wednesday, October 16. We expect the company's revenue to be $14.85 billion and earnings to be $3.15 per share, slightly above consensus estimates of $14.78 billion and $3.12, respectively -Dollar lies. The company likely saw lower passenger revenue and higher costs in the third quarter. View our interactive dashboard analysis United Airlines FY2024Q3 Earnings Preview For more details on United Airlines' revenue and earnings for the quarter, click here.

Trends to watch out for in the third quarter

United Airlines is expected to continue to benefit from increased capacity, while utilization and returns may be lower than in the prior-year quarter. Additionally, the company is likely to continue to experience higher non-fuel costs, primarily due to increased wages. The company's PRASM (passenger revenue per available seat mile) is expected to post a low-single-digit year-over-year decline to $16.80 in the third quarter. With a likely increase in overall costs, the company's bottom line is expected to decline 14% to $3.15 on an adjusted basis.

How did United Airlines perform in the second quarter?

United Airlines' $15 billion in revenue increased 5.7% from a year ago. The company reported an 8.3% increase in available seat miles, while PRASM fell 2.9%. The company's adjusted pre-tax margin fell to 12.1% in the second quarter of 2024 from 15.3% in the year-ago quarter. The company's bottom line was $4.14 on an adjusted basis, up from $5.03 in the second quarter of 2023. It also reported a 3.8% year-over-year increase in average fuel costs per gallon. United Airlines expects adjusted earnings per share in the third quarter to be between $2.75 and $3.25.

What does it mean for UAL stock?

We believe UAL stock has little room for growth. We appreciate Review of United Airlines to $64 per share, representing less than 10% upside potential from current levels of around $60. Our forecast is based on a 6x P/E ratio for UAL and expected earnings of $9.94 per share and on an adjusted basis for the full year 2024. The company has adjusted earnings per share in the range of $9.00 to $11.00 forecast.

With a slight increase expected in the third quarter, UAL stock could reach higher next week. However, we would pay attention to any revisions to earnings estimates and the trends in average returns and occupancy, which could determine the share price movement in the near term.

Looking at the performance of the UAL stock over a somewhat longer period of time, the changes in the stock price were anything but consistent, although the annual returns were significantly less volatile than those of the S&P 500. This also applies to the Trefis High Quality Portfolio with a collection of 30 stocks less volatile. And it has outperformed the S&P 500 every year in the same period. Why is that? As a group, the stocks in the HQ Portfolio offered better returns with lower risk compared to the benchmark index. less of a roller coaster ride, as the key performance indicators of the HQ portfolio show.

While United Airlines stock looks like it has little room for growth, take a look at how things look different Colleagues from United Airlines Fare for important metrics. You can find further valuable comparisons for companies in all industries at Peer comparisons.

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