United Airways plans $1.5 billion share buyback, forecasts fourth-quarter earnings above estimates

United Airways mentioned Tuesday that it’s beginning a $1.5 billion share buyback because the provider reported higher-than-expected earnings for the busy summer season journey season and forecast sturdy outcomes for the final three months of the 12 months.

United expects to earn an adjusted $2.50 to $3.00 a share within the fourth quarter, in comparison with $2.00 a share a 12 months earlier and the $2.68 analysts polled by LSEG estimated.

Here’s what United reported for the third quarter in contrast with what Wall Avenue anticipated, primarily based on common estimates compiled by LSEG:

• Earnings per share: $3.33 adjusted vs. $3.17 anticipated
• Income: $14.84 billion vs. $14.78 billion anticipated

The share buyback could be United’s first since earlier than the Covid-19 pandemic. U.S. airways obtained greater than $50 billion in authorities help in the course of the pandemic journey hunch that prohibited share repurchases and dividends, although airways have been nonetheless preventing for monetary stability.

Southwest Airways introduced a $2.5 billion share repurchase program final month.

“Like different main airways and corporations, we’re initiating a measured, strategic share repurchase program,” United CEO Scott Kirby mentioned in a notice to workers on Tuesday. “Importantly, my dedication to you is that investing in our individuals and our enterprise will at all times be my prime precedence even whereas we institute this share repurchase program.”

For the third quarter, United posted income of $14.84 billion, up 2.5% from a 12 months earlier and above analysts’ estimates. It reported web earnings of $965 million, down 15% from a 12 months in the past.

United mentioned home unit income was constructive in August and September in comparison with final 12 months as airways trimmed a glut of flights that have been pushing down fares. United expanded capability by 4.1% within the third quarter. The provider mentioned company income rose 13% within the quarter; premium income, together with enterprise class tickets, rose 5%; and gross sales from its no-frills primary financial system tickets have been up 20%.

The airline final week unveiled a far-flung growth for subsequent 12 months that included new flights to Mongolia, Senegal, Spain and Greenland in a chase for worldwide journey demand.

Adjusting for one-time objects, United reported earnings per share of $3.33, topping Wall Avenue forecasts and United’s estimate in July of $2.75 to $3.25 a share.

Airline executives will maintain a name with analysts at 10:30 a.m. ET on Wednesday and can seemingly face questions on demand for the tip of the 12 months and into 2025, in addition to manufacturing issues at Boeing, the place most factories have been idled throughout a greater than monthlong machinist strike.

United’s flight attendants’ union, which hasn’t but reached a brand new labor settlement with the corporate slammed the airline’s resolution to renew buybacks.

In a press release, Sara Nelson, president of the Affiliation of Flight Attendants-CWA, which represents crews at United, Spirit, Alaska and different carriers, mentioned: “That cash United simply promised Wall Avenue belongs to Flight Attendants who labored all through the pandemic and through this taxing restoration for all of us on the frontlines.”