United CEO promises action after missing estimates
Net income rose in the most recent quarter, but still came in below estimates. The company didn't specify what changes it will make.
By Ted Reed
United (UAL) said net income in the third quarter rose 13.5 percent but the carrier once again disappointed analysts as it missed estimates. Executives promised "prompt" but unspecified actions.
The airline reported net income excluding items of $590 million, or $1.51 a share. Analysts surveyed by Thomson Reuters had estimated $1.54. Revenue rose 3.2 percent to $10.2 billion. Analysts had estimated $10.3 billion.
Including $211 million in special charges, United reported net income of $379 million, or 98 cents a share.
"We have significantly improved our operations, customer service and product, and are now competitive on all those dimensions," said CEO Jeff Smisek, in a prepared statement. "However, we are not satisfied with our financial performance, and are taking prompt actions to increase our revenue and operate more efficiently across the company."
During the quarter, consolidated passenger revenue per available seat mile rose 2.7 percent. Domestic PRASM gained 2.9 percent, Atlantic gained 9.0 percent, Latin America gained 0.5 percent, but Pacific PRASM fell by 9.4 percent as Pacific revenue fell 11 percent to $1.3 billion.
"This quarter my co-workers consistently delivered solid operational performance, and our customer satisfaction scores continue to rise," said Jim Compton, chief revenue officer. "We are, however, disappointed by the pace of our revenue improvements, and we are taking numerous actions to improve our performance to more swiftly realize our full revenue potential."
On the cost side, consolidated cost per available seat mile excluding fuel and special charges rose 3.6 percent as consolidated capacity fell 1.1 percent.
United missed estimates even though it had guided toward less-than-expected third-quarter international revenue. In a late September filing, United said third-quarter growth in passenger revenue per available seat mile would be about one point below prior guidance due to lower-than-expected results in international markets. At least four analysts reduced estimates.
UAL ended the third quarter with $6.7 billion in unrestricted liquidity.
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