United Airlines Announces Third-Quarter Financial Results: Revenue Beats Consensus on Solid Domestic - and Record-Breaking International Performance.
Highlights:
* Company had record setting profits in both
* Pre-tax income increased 29% y-o-y; on an adjusted basis1 increased 37%
* Delivered strong operational performance, with September being best on-time performance of the year
* Increasingly powerful segmentation strategy proving to be a competitive advantage
CHICAGO-
Total third-quarter top line revenue was up 12.5% year-over-year, a record revenue quarter and near the high end of guidance. United experienced a strong and steady domestic demand environment in the quarter, with 9% revenue growth year-over-year, outpacing second quarter results. The company saw strength in close-in bookings in August and September with both months well ahead of year-over-year demand.
In the international space, profits were at record highs in both the
The company has built a winning strategy around giving customers choice when it comes to the level of service they want. Demand for premium products remains high, with great success in the premium economy cabin where revenue has outpaced capacity growth since its introduction in 2019. In total, revenue from premium products was up 20% year-over-year in the quarter and accounts for more than half of all passenger revenue. Basic Economy has also provided another popular option for customers and has been a great competitive offering with revenue for that product in the quarter up 50% year-over-year.
United continues to see the benefits of having an award winning airline loyalty program. The third quarter showed a continued multi-year new MileagePlus member trend, setting a record for third quarter enrollments and nearly doubling the number of new members versus the third quarter just five years ago. Spending across the
'Thank you to our extraordinary United team who delivered a record-setting operational performance for our customers in August and September,' said
Third-Quarter Financial Results
Capacity up 15.7% compared to third-quarter 2022.
Total operating revenue of
TRASM down 2.8% compared to third-quarter 2022.
CASM down 3.6%, and CASM-ex1 up 2.6%, compared to third-quarter 2022.
Pre-tax income of
Net income of
Diluted earnings per share of
Average fuel price per gallon of
Trailing twelve months adjusted net debt1 to adjusted EBITDAR1 of 2.5x.
Key Highlights
United pilots, represented by the
Announced promotions of
Introduced a new United First seat that includes a wireless charging station in every arm rest and 13-inch seatback screens for domestic aircraft.
Opened two new
Announced the
Launched the industry-leading United Military Pilot Program giving full-time, active-duty
Customer Experience
Became the first
Onboarded new amenity kits for premium passengers in international, transcontinental, and
Was awarded the World's Best Airline App by the World Aviation Festival for the airline's industry leading capabilities on making the day of travel easier.
Partnered with
Operations
Set the company's record for the highest daily average of revenue passengers ever carried in a quarter at more than 482,000 passengers.
Achieved the most ever quarterly mainline (2,621) and widebody (324) daily departures in United's history.
Held the second highest third quarter seat factor in history behind third-quarter 2022.
Network
Flew over 436 domestic markets on mainline aircraft this quarter - up from 367 in the third quarter of 2019.
Made significant growth in the
Announced a major international expansion to
Announced United's return to
Introduced 127 new, nonstop flights to select cities this fall to help college football fans travel to games.
Communities
Announced an investment in
Transported more than 110,000 lbs. of relief supplies in support of Maui Disaster Relief efforts. Through Miles on a Mission, United and MileagePlus members donated 55 million miles to relief efforts in
Hosted over 100 volunteer events for United's 3rd Annual September of Service with more than 2,200 United employees volunteering more than 7,300 hours - the equivalent of over
In partnership with
Partnered with
Earnings Call
UAL will hold a conference call to discuss third-quarter 2023 financial results, as well as its financial and operational outlook for fourth-quarter 2023 and beyond, on
Outlook
This press release should be read in conjunction with the company's Investor Update issued in connection with this quarterly earnings announcement, which provides additional information on the company's business outlook (including certain financial and operational guidance) and is furnished with this press release with the
The company's business outlook is subject to risks and uncertainties applicable to all forward-looking statements as described elsewhere in this press release. Please see the section entitled 'Cautionary Statement Regarding Forward-Looking Statements.'
About United
At United, Good Leads The Way. With
Website Information
We routinely post important news and information regarding United on our corporate website, www.united.com, and our investor relations website, ir.united.com. We use our investor relations website as a primary channel for disclosing key information to our investors, including the timing of future investor conferences and earnings calls, press releases and other information about financial performance, reports filed or furnished with the
Cautionary Statement Regarding Forward-Looking Statements:
This press release and the related attachments and Investor Update (as well as the oral statements made with respect to information contained in this release and the attachments) contain certain 'forward-looking statements,' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, relating to, among other things, goals, plans and projections regarding the company's financial position, results of operations, market position, capacity, fleet, announced routes (which may be subject to government approval), product development, ESG related strategy initiatives and business strategy. Such forward-looking statements are based on historical performance and current expectations, estimates, forecasts and projections about the company's future financial results, goals, plans, commitments, strategies and objectives and involve inherent risks, assumptions and uncertainties, known or unknown, including internal or external factors that could delay, divert or change any of them, that are difficult to predict, may be beyond the company's control and could cause the company's future financial results, goals, plans, commitments, strategies and objectives to differ materially from those expressed in, or implied by, the statements. Words such as 'should,' 'could,' 'would,' 'will,' 'may,' 'expects,' 'plans,' 'intends,' 'anticipates,' 'indicates,' 'remains,' 'believes,' 'estimates,' 'projects,' 'forecast,' 'guidance,' 'outlook,' 'goals,' 'targets,' 'pledge,' 'confident,' 'optimistic,' 'dedicated,' 'positioned,' 'on track' and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. All statements, other than those that relate solely to historical facts, are forward-looking statements.
Additionally, forward-looking statements include conditional statements and statements that identify uncertainties or trends, discuss the possible future effects of known trends or uncertainties, or that indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to us on the date of this release. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law or regulation.
Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: execution risks associated with our strategic operating plan; changes in our network strategy or other factors outside our control resulting in less economic aircraft orders, costs related to modification or termination of aircraft orders or entry into less favorable aircraft orders, as well as any inability to accept or integrate new aircraft into our fleet as planned; any failure to effectively manage, and receive anticipated benefits and returns from, acquisitions, divestitures, investments, joint ventures and other portfolio actions, or related exposures to unknown liabilities or other issues or underperformance as compared to our expectations; the adverse impacts of the ongoing COVID-19 global pandemic on our business, operating results, financial condition and liquidity; adverse publicity, harm to our brand, reduced travel demand, potential tort liability and voluntary or mandatory operational restrictions as a result of an accident, catastrophe or incident involving us, our regional carriers, our codeshare partners or another airline; the highly competitive nature of the global airline industry and susceptibility of the industry to price discounting and changes in capacity, including as a result of alliances, joint business arrangements or other consolidations; our reliance on a limited number of suppliers to source a majority of our aircraft and certain parts, and the impact of any failure to obtain timely deliveries, additional equipment or support from any of these suppliers; disruptions to our regional network and
Non-GAAP Financial Information:
In discussing financial results and guidance, the company refers to financial measures that are not in accordance with
Because the non-GAAP financial measures are not calculated in accordance with GAAP, they should not be considered superior to and are not intended to be considered in isolation or as a substitute for the related GAAP financial measures presented in the press release and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in method and in the items being adjusted. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
Please refer to the tables accompanying this release for a description of the non-GAAP adjustments and reconciliations of the historical non-GAAP financial measures used to the most comparable GAAP financial measure and related disclosures.
tables attached-
NON-GAAP FINANCIAL INFORMATION
UAL evaluates its financial performance utilizing various accounting principles generally accepted in
Because the non-GAAP financial measures are not calculated in accordance with GAAP, they should not be considered superior to and are not intended to be considered in isolation or as a substitute for the related GAAP financial measures presented in the press release and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in method and in the items being adjusted. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
The company does not provide a reconciliation of forward-looking measures where the company believes such a reconciliation would imply a degree of precision and certainty that could be confusing to investors and is unable to reasonably predict certain items contained in the GAAP measures without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred and are out of the company's control or cannot be reasonably predicted. For the same reasons, the company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures. See 'Cautionary Statement Regarding Forward-Looking Statements' above. The information below provides an explanation of certain adjustments reflected in the non-GAAP financial measures and shows a reconciliation of non-GAAP financial measures reported in this press release to the most directly comparable GAAP financial measures. Within the financial tables presented, certain columns and rows may not add due to the use of rounded numbers. Percentages and earnings per share amounts presented are calculated from the underlying amounts.
CASM: CASM is a common metric used in the airline industry to measure an airline's cost structure and efficiency. UAL reports CASM excluding special charges, third-party business expenses, fuel expense, and profit sharing. UAL believes that adjusting for special charges is useful to investors because those items are not indicative of UAL's ongoing performance. UAL also believes that excluding third-party business expenses, such as maintenance, flight academy, ground handling and catering services for third parties, provides more meaningful disclosure because these expenses are not directly related to UAL's core business. UAL also believes that excluding fuel expense from certain measures is useful to investors because it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. UAL excludes profit sharing because it believes that this exclusion allows investors to better understand and analyze UAL's operating cost performance and provides a more meaningful comparison of our core operating costs to the airline industry.
Adjusted EBITDA and EBITDAR: UAL also reports EBITDA and EBITDAR excluding special charges, nonoperating unrealized (gains) losses on investments, net, nonoperating debt extinguishment and modification fees and nonoperating special termination benefits. UAL believes that adjusting for these items is useful to investors because they are not indicative of UAL's ongoing performance.
Adjusted Capital Expenditures and Free Cash Flow: UAL believes that adjusting capital expenditures for assets acquired through the issuance of debt, finance leases and other financial liabilities is useful to investors in order to appropriately reflect the total amounts spent on capital expenditures. UAL also believes that adjusting net cash provided by (used in) operating activities for capital expenditures, net of flight equipment purchase deposit returns, adjusted capital expenditures, and aircraft operating lease additions is useful to allow investors to evaluate the company's ability to generate cash that is available for debt service or general corporate initiatives.
Adjusted Total Debt and Adjusted Net Debt: Adjusted total debt is a non-GAAP financial measure that includes current and long-term debt, operating lease obligations and finance lease obligations, current and noncurrent other financial liabilities and noncurrent pension and postretirement obligations. Adjusted net debt is adjusted total debt minus cash, cash equivalents and short-term investments. UAL provides adjusted total debt and adjusted net debt because we believe these measures provide useful supplemental information for assessing the company's debt and debt-like obligation profile
Labor contract ratification bonuses: During the nine months ended
(Gains) losses on sale of assets and other special charges: During the three and nine months ended
During the three and nine months ended
Nonoperating unrealized (gains) losses on investments, net: All amounts represent changes to the market value of equity investments.
Nonoperating debt extinguishment and modification fees: During the nine months ended
During the nine months ended
Effective tax rate:
The company's effective tax rates were as follows:
Three Months EndedSeptember 30 , Nine Months EndedSeptember 30 ,
2023 2022 2023 2022
Effective tax rate 23.4 % 18.3 % 22.9 % 24.3 %
The provision for income taxes is based on the estimated annual effective tax rate, which represents a blend of federal, state and foreign taxes and includes the impact of certain nondeductible items.
1 For additional information about the non-GAAP measures used in this press release, see 'Non-GAAP Financial Information' below.
See full release at: https://www.united.com/en/aw/newsroom/announcements/cision-125299
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