United Airlines saw its profit jump 20% in the second quarter thanks to a strong demand for international travel. However, it projected a weak third quarter due to fare discounts across the sector as airlines try to fill out seats amid an oversupply of flights.
United reported $1.32 billion in profit in Q2 compared to $1.08 billion in the same period of 2023. The airliner ended the quarter with $4.14 in adjusted earnings per share, beating the analysts’ estimates of $3.93. However, its revenue of $14.99 billion, an improvement of 5.7%, came slightly below the expected $15.06 billion.
For the current quarter, United forecasts earnings between $2.75 and $3.25 per share, which is below the $3.44 per share expected by analysts. For the full year, the airliner expects $9 to $11 in adjusted earnings per share.
Still, United CEO Scott Kirby predicts there will be fewer flights in the second part of August and beyond, which would improve the airliner’s pricing power.
“Looking forward, we see multiple airlines have begun to cancel loss-making capacity, and we expect leading unit revenue performance among our largest peers in the second half of the third quarter,” Kirby said.
The shares of United Airlines plunged close to 4% in the aftermath of weak Q3 guidance but later returned to trade closer to their Wednesday’s close price of $46.94.