United Airlines (UAL) reported better-than-expected first-quart results, beating estimates on both the top and bottom lines. The company posted revenue of $12.54 billion, exceeding the analyst estimate of $12.44 billion. On the bottom line, United reported an adjusted loss of $0.15 per share, outperforming the expected loss of $0.57 per share.
To provide insights on the airline’s performance, Third Bridge Global Sector Lead for Industrials, Materials and Energy Peter McNally joins Market Domination.
McNally acknowledges that while United’s earnings beat expectations, the expectations "were pretty low" in light of the "high-profile issues" the company faced during the quarter, including challenges with the Boeing (BA) 737 Max-9 fleet. However, he emphasizes that the key going forward will be United’s outlook on capital expenditures and aircraft deliveries.
McNally emphasizes the ongoing airplane shortage, as "Boeing’s issues pre-date the pandemic" and Airbus cannot meet the entire industry’s demand. As a result, he notes that United will be "pushing out capex" to secure the necessary aircraft to meet steady consumer travel demand.
Looking ahead, McNally forecasts heightened scrutiny and oversight from the government and the Federal Aviation Administration, noting that "it’s not making it any easier to be an airline these days."
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