United Airlines Holdings Inc (UAL.US) reported second-quarter results that surpassed Wall Street expectations, but the airline cautioned that billions of dollars in additional fuel costs continue to weigh on its profitability.
The financial report shows that United Airlines' second-quarter revenue reached $17.67 billion, a 16% increase year-over-year, exceeding the analyst consensus estimate of $17.61 billion. Net profit fell by over 17% to $805 million. Adjusted net profit was $649 million, with adjusted earnings per share coming in at $1.99, better than the analyst consensus of $1.88.
In the second quarter, the airline's capacity grew by 3.5% compared to the same period last year. Unit revenue increased by 12.1%, marking the highest growth rate since early 2023. The company noted growth in revenue from premium cabins, corporate clients, and basic economy tickets, with unit revenue rising on both domestic and international routes.
Looking ahead, United Airlines forecasts third-quarter adjusted earnings per share to be between $2.50 and $3.50, while analysts had expected $3.60 on average. The company also anticipates full-year adjusted earnings per share to be in the range of $9 to $11, having revised its April forecast which was between $7 and $11. The earlier revision in January's full-year profit outlook was due to attacks on Iran by the US and Israel at the end of February.
According to Argus data released by the industry group Airlines for America, jet fuel prices at major U.S. airports have surged 34% in July alone as of this Tuesday. Against the backdrop of escalating and de-escalating tensions between the U.S. and Iran, jet fuel prices have been highly volatile. Jet fuel is the second-largest cost item for airlines after labor.
United Airlines stated that, based on current fuel prices, its fuel costs for this year are projected to be nearly $6 billion higher than the forecast made in early 2026. The company's second-quarter fuel expense rose 84% year-over-year to $2.3 billion. This calculation is based on Tuesday's fuel prices.
The airline indicated it will be able to absorb up to approximately 90% of the increased fuel costs this quarter and plans to fully cover the additional costs in the fourth quarter. Competitor Delta Air Lines Inc (DAL.US) has previously stated that it is passing more of the rising fuel costs onto passengers. Both airlines have pointed out that despite fare increases, demand remains robust.
United Airlines noted that due to the extreme volatility in fuel prices, it has updated its performance guidance to incorporate the latest fuel price forecasts. The company said that since the beginning of July, rising fuel prices have reduced its third-quarter adjusted earnings per share by $1.12.
The airline also mentioned that due to the sustained increase in fuel costs this year, it may further scale back its capacity expansion plans for the year. At the time of reporting, United Airlines' shares were down over 2% in after-hours trading on Wednesday.
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