By Rajesh Kumar Singh
CHICAGO (Reuters) -United Airlines Holdings on Tuesday reported higher-than-expected third-quarter earnings and forecast a stronger profit in the current quarter due to a robust rebound in travel demand.
Its shares jumped nearly 8% to $40.14 in extended trading.
The Chicago-based carrier reported an adjusted profit of $2.81 per share for the third quarter, topping analysts’ expectations by 53 cents, according to Refinitiv data. That marked the company’s best performance since the third quarter of 2019, just before the COVID-19 pandemic hit.
United said it expects an adjusted profit of $2.00 to $2.25 per share in the fourth quarter through December on a 24% to 25% jump in total revenue per available seat mile compared with the same quarter in 2019.
That would be more than double Wall Street estimates of 98 cents a share for the fourth quarter.
Carriers are using 2019, before the pandemic, as the benchmark for their performance.
“Despite growing concerns about an economic slowdown, the ongoing COVID recovery trends at United continue to prevail and we remain optimistic that we’ll continue to deliver strong financial results in the fourth quarter, 2023 and beyond,” Chief Executive Scott Kirby said in a statement.
The company said it remains confident of hitting adjusted pre-tax margin target of 9% in 2023.
United’s upbeat outlook comes days after rival Delta Air Lines Inc forecast stronger-than-expected profit in the fourth quarter on expectations that unquenched thirst for travel would drive up bookings despite growing risks of an economic recession.
U.S. carriers are enjoying the strongest consumer demand in three years. The reopening of borders closed by the COVID-19 pandemic, as well as a strong U.S. dollar are encouraging more Americans to travel overseas while office reopenings are boosting corporate travel demand.
That is helping United, which is more exposed to business and long-haul international travel than rivals.
(Reporting by Rajesh Kumar SinghEditing by Bill Berkrot)