United Airlines (NASDAQ: UAL) exceeded third-quarter earnings expectations and announced a $1.5 billion share repurchase plan, with stock remaining steady in premarket trading.
The airline reported adjusted earnings per share of $3.33, beating the expected $3.13. Revenue was $14.84 billion, slightly higher than the anticipated $14.77 billion and up 2.5% from last year.
CEO Scott Kirby stated that there was a significant improvement in revenue trends as unprofitable flights left the market in mid-August.
Strong demand was noted, with corporate revenue up 13% in September and premium revenue up 5% for the quarter.
Kirby added, “A successful summer 2024 is just the start for us, as our enhanced customer experience positions United as an industry leader.”
Year-to-date, the company’s free cash flow reached $3.44 billion, the highest among US airlines, according to Citi analysts, who found the results very promising.
The board’s $1.5 billion share repurchase program represents about 7% of United’s market value and is the first since the COVID-19 pandemic.
CFO Michael Leskinen mentioned, “We can now add a repurchase program while investing in and reducing our debt, targeting net leverage below 2x in the coming years.”
For Q4, United expects earnings of $2.50 to $3.00 per share, matching the analyst consensus of $2.75.
Bernstein analysts anticipate a positive stock reaction to the improved revenue trends and the buyback, despite a modest Q4 guidance.
The airline also achieved operational success, ranking first in on-time departures among major U.S. airlines this quarter.
Senad Karaahmetovic contributed to this report.
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