United Airlines Holdings, Inc. UAL reported third-quarter 2026 adjusted earnings of $2.54 per share, down 8.6% year over year and below the Zacks Consensus Estimate of $2.60 by 2.3%. Higher fuel expenses weighed on profitability despite strong revenue growth.
Operating revenues rose 17.4% year over year to $17.88 billion but missed the consensus mark of $17.91 billion by 0.2%. A 15.9% increase in total revenue per available seat mile or TRASM, supported the top line, driven by strength across premium, loyalty and contracted business revenues.
United Airlines Holdings Inc Price, Consensus and EPS Surprise
United Airlines Holdings Inc price-consensus-eps-surprise-chart | United Airlines Holdings Inc Quote
UAL Benefits From Broad-Based Passenger Revenue Growth
Passenger revenues increased 17.6% year over year to $16.24 billion. Domestic passenger revenues advanced 19.9% year over year, while international passenger revenues rose 14.3%. Latin America revenues rose 24.2% year over year, Pacific revenues climbed 16.5% and Atlantic revenues improved 10.1% year over year.
Within the Atlantic region, Europe revenues increased 13.3% year over year, partly offset by a 17.3% decline in the Middle East, India and Africa region. Cargo revenues jumped 22.9% year over year to $529 million, while other operating revenues grew 12.9% to $1.11 billion.
Premium revenues rose 17% year over year, while Basic Economy and loyalty revenues increased 16% and 17%, respectively. Contracted business revenues advanced 26% year over year, reflecting resilient close-in demand. Economy cabin unit revenues improved 17% year over year.
United Airlines Sees Higher Yields Despite Softer Traffic
Consolidated passenger revenue per available seat mile increased 16.1% year over year, while passenger yield climbed 16.8%. Domestic PRASM advanced 14.5% year over year, while international PRASM grew 17.4%, reflecting strong revenue performance across the network.
Traffic, measured in revenue passenger miles, increased 0.7% year over year, while capacity expanded 1.3%. As capacity growth outpaced traffic, the consolidated load factor declined 0.5 percentage points to 83.9%.
United Airlines transported a record 49.5 million passengers, up 2.4% year over year from the prior-year period. Domestic load factor declined 0.9 points to 84.4%, while international load factor remained nearly unchanged at 83.2%.
UAL Faces Rising Fuel and Operating Expenses
Operating expenses increased 18.8% year over year to $16.43 billion, outpacing revenue growth. Aircraft fuel expenses surged 61.6% year over year to $4.84 billion as the average fuel price increased 60.3% to $3.90 per gallon. Fuel consumption rose 0.8% year over year.
Cost per available seat mile increased 17.3% year over year to 18.56 cents. CASM-ex, which excludes fuel, profit sharing, special items and third-party business expenses, rose 7.8% year over year to 13.09 cents.
Salaries and related costs increased 8.9% year over year to $4.96 billion. Distribution expenses climbed 13.9% year over year, while landing fees and other rent rose 4.4%. Aircraft maintenance expenses increased 3.5% year over year.
United Airlines Reports Lower Adjusted Profitability
Adjusted operating income declined 6.9% year over year to $1.23 billion, while the adjusted operating margin contracted 1.8 percentage points to 6.9%. Adjusted pre-tax income fell 8.7% to $1.11 billion, with the adjusted pre-tax margin narrowing to 6.2% from 8%.
Adjusted net income decreased 8.4% year over year to $833 million. On a reported basis, net income increased 8.5% year over year to $1.03 billion, while earnings rose to $3.14 per share from $2.90.
The difference between reported and adjusted results reflected special credits, primarily associated with gains from aircraft sale-leaseback transactions.
UAL Sees Cash Flow Pressure, Maintains Liquidity
Operating cash flow totaled $465 million during the third quarter compared with $1.22 billion a year ago. Free cash flow was negative $1.84 billion compared with negative $153 million in the prior-year period.
Adjusted capital expenditures totaled $2.19 billion, reflecting continued fleet and infrastructure investments. Available liquidity ended the quarter at $17.7 billion.
Cash and cash equivalents totaled $6.65 billion, while short-term investments were $8.01 billion. Debt, finance lease obligations and other financial liabilities were $26.40 billion. Trailing-12-month net leverage stood at 2.4 times.
United Airlines Expects Revenue Momentum in Q4
United Airlines expects fourth-quarter 2026 adjusted earnings between 50 cents and $1.50 per share (Zacks Consensus Estimate of $1.75 lies above the guided range), assuming an all-in average fuel price of approximately $4.80 per gallon.
Management expects fourth-quarter revenue growth to accelerate from the third quarter, exceeding 20% year over year. Unit revenue growth is also expected to accelerate, while unit cost growth excluding fuel is projected to moderate.
Adjusted capital expenditures are forecast at approximately $7.5 billion for 2026.
United Airlines' fleet plan calls for 1,166 mainline aircraft and 441 regional aircraft by year-end. The airline has installed Starlink on more than 640 aircraft and expects fleet-wide availability by the end of 2027.
Currently, UAL has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q3 Performance of Other Transportation Companies
Delta Air Lines DAL reported third-quarter 2026 earnings (excluding 57 cents from non-recurring items) of $1.72 per share, missing the Zacks Consensus Estimate of $1.80 by 4.44%. Earnings increased year over year despite sharply higher fuel costs and rising non-fuel expenses.
Adjusted revenues climbed 16% year over year to $17.59 billion but missed the consensus estimate of $17.74 billion by 0.9%. Broad demand strength and healthy yields lifted adjusted total revenue per available seat mile, or TRASM, 15%, while premium and diversified revenue streams continued to expand.
J.B. Hunt Transport Services, Inc. JBHT reported third-quarter 2026 earnings of $1.82 per share, up 3.4% from $1.76 a year ago. The figure beat the Zacks Consensus Estimate of $1.81 by 0.6%.
Operating revenues climbed 20.4% year over year to $3.68 billion and surpassed the consensus mark of $3.56 billion by 3.2%. Stronger pricing, an 8% increase in Intermodal loads and higher brokerage volumes supported growth. However, elevated driver-related expenses, fuel costs and insurance claims pressured profitability.
Alaska Air Group, Inc. ALK reported third-quarter 2026 adjusted earnings of 36 cents per share, excluding certain tax impacts, beating the Zacks Consensus Estimate of 35 cents by 2.9%. The company had reported adjusted earnings of $1.05 per share a year earlier. Higher fuel expenses weighed on profitability despite strong revenue momentum.
Operating revenues increased 14.4% year over year to $4.30 billion but missed the consensus mark of $4.31 billion by 0.1%. Revenue per available seat mile, or RASM, rose 11.7%, supported by strong yields, premium demand and loyalty revenues.
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