Source: Zhitong Finance
Wall Street's reaction to the United Continental Airlines earnings report has been mostly positive.
$United Airlines (UAL.US)$Earlier, better-than-expected first-quarter earnings were announced, and the outlook for the second quarter was optimistic. The airline would have been profitable in the first quarter without the Boeing MAX 9 being grounded. Wall Street's reaction to the company's earnings report has been mostly positive. Deutsche Bank, Morgan Stanley, and Citibank have all reaffirmed the “buy” rating.
Affected by this, United Continental Airlines opened sharply higher today. Up to now, the stock price has risen 11.14% to 46.125 US dollars.
As far as deliveries are concerned, due to Boeing's difficulties in producing and delivering Max jets, United Continental Airlines currently expects to receive 61 Max jets this year, which is lower than the previous estimate of 101. “We've adjusted our fleet plans to better reflect the reality that manufacturers can deliver,” said Scott Kirby, CEO of United Continental Airlines.
Deutsche Bank analyst Michael Linenberg said that the market is resetting expectations for the full year outlook for United Continental Airlines because the company dealt with some issues in the March quarter and the company had to drastically adjust its fleet plan due to delays in aircraft deliveries. “The loss of the Israeli franchise due to geopolitical events beyond the company's control, as well as the grounding of the Boeing 737 MAX 9 fleet, were major negative factors for this quarter,” he noted.
Lineneberg also cautioned that United Continental faced the biggest challenge in the third quarter because the company lacked a major southeast hub and had a relatively small share of north-south routes in the seasonally strong Florida and Caribbean markets. “As a result, we were pleasantly surprised by the loss of $0.15 per share in the first quarter, which is superior to the company's initial loss guidance of $0.35 to $0.85 per share.”
Morgan Stanley analyst Ravi Shanker warned, “We expect this guidance to be welcomed by the market, but we have noticed that United Airlines did not provide much detail on the second quarter guidance, and the performance conference call may carefully review the details.” Wall Street is generally optimistic about the company, but the earnings and guidance updates are expected to be enough to attract more investors.
Citibank analyst Stephen Tren said, “Overall, these results and guidelines can at least ease the oversold situation of United Continental Airlines shares.”
Editor/jayden