United Airlines
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United Airlines Expected to Post a Loss This Week

By:Mike Butler

Flight groundings from aircraft issues caused financial turbulence, but analysts expect the airline to focus on growth

  • United Airlines will report quarterly earnings on Tuesday April 16 after the stock market closes.
  • United is expected to report an EPS loss of $0.57 on $12.39 billion in revenue.
  • United is expected to post a loss due to flight groundings from aircraft issues, but growth is a focal point for the next few years.

For the first time since April 19, 2023, United Airlines (UAL) is expected to post an earnings-per-share loss for the quarter due to Boeing (BA) aircraft issues.

United is expected to report an earnings-per-share (EPS) loss of ($0.57) on $12.39 billion in revenue.

While the quarterly earnings report looks bleak this time around, the popular airline has eyes set on growth initiatives for the next few years. In its last earnings announcement, UAL announced that it has an order for 110 more aircraft for delivery in 2028.

Scott Kirby, United Airlines CEO, had some positive words last quarter looking ahead to the future:
"Our plans really came together in 2023, and I want to thank the United team for all of the hard work it took to get us there ... Despite unpredictable headwinds, we delivered on our ambitious EPS target that few thought possible–and set new operational records for our customers..."

"Looking ahead," Kirby added, "we expect these trends to continue and United is incredibly well positioned to capitalize on them and to deliver on our short and long-term financial targets."


UAL stock opened the year at 41.13, and currently sits right around the same price at $41 with plenty of bullish and bearish action throughout the year so far. The stock has traded to a low of $37.68 and a high of $48.73 so far this year. The past few weeks though, the stock has dropped from its annual high back to the opening print of the year.


What options tell us

Looking at the options market ahead of the earnings call, we can see how implied volatility is structured through different periods. For this earnings announcement, the options market is pricing in an expected stock price move of +-$3.10 for the week. This is a pretty high percentage of the current stock price, at just over 7%.

Looking further out in time, we can see that the June options cycle has an expected move of +-$5.82. This tells us that the market is placing a large weight on the earnings call, and we should expect to see some volatility after the report is made on April 16.

Bullish on United Airlines earnings

It can be scary when a company beats earnings expectations three quarters in a row, both from an EPS and revenue perspective and then is expected to post a loss due to third-party issues.

But reduced expectations could mean an easier path to beating expectations. Bullish United traders and investors will likely want to see a plan of resolution for Boeing plane issues, and strong guidance for the rest of the year.
Delta Air Lines (DAL) reported earnings last week and we saw the stock jump initially after strong demand expectations for travel were announced, which could trickle into United as well.

Bearish on United Airlines Earnings

United bears are likely expecting a bigger miss than expected from an EPS perspective.

The overall stock market has gained some turbulence in the past few weeks, which could scare off investors and traders if United cannot post strong sentiment for the rest of the year, and especially if it misses big on the expected EPS and revenue figures.

Tune in to Options Trading Concepts Live at 11 a.m. Central Time on Tuesday, April 16 for some in-depth earnings strategy ideas on tastylive.

Mike Butler, tastylive director of market intelligence, has been in the markets and trading for a decade. He appears on Options Trading Concepts Live, airing Monday-Friday. @tradermikeyb

For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.

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