United Airlines (UAL) reported a deeper fourth-quarter loss than expected and gave weak Q1 views Wednesday as the uneven rollout of Covid-19 vaccines is expected to fuel a choppy recovery in air travel. United Airlines stock fell.
XThe report comes a week after Delta Air Lines (DAL) reported mixed Q4 results and gave weak Q1 guidance, but the airline sees a turnaround on its cash burn by the spring.
United Airlines Earnings
Estimates: A loss of $6.56 per share vs. a profit of $2.67 in the year-ago quarter. Revenue is seen falling nearly 69% to $3.4 billion, according to Zacks, though Refinitiv put it at $3.44 billion.
Results: Per-share loss of $7 on revenue of $3.41 billion, down 69%. The daily cash burn rate averaged $23 million vs. $21 million in Q3. Cargo revenue jumped 77% on international flying and "strategic international cargo-only missions." United ended 2020 with $19.7 billion in available liquidity
Outlook: United sees Q1 operating revenue to be down 65%-70% from a year ago, worse than views for a 47% drop, excluding potential improvement from any accelerated vaccine deployment. Q1 capacity is seen down 51%.
Management also expects to top its 2019 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin in 2023.
Stock: Shares fell 1.4% late after closing up 1% at 45.18 on the stock market today. United Airlines stock is in a seven-week consolidation with a 51.41 entry point, according to MarketSmith analysis.
Airline stocks were broadly higher. Delta rallied 3.25%. American Airlines (AAL) and Southwest Airlines (LUV), which report next week, finished up 1.25% and 2.8%, respectively.
The coronavirus pandemic has been a major headwind for airline stocks. But United Airlines and others received help to bring back furloughed workers in Congress' latest Covid-19 relief bill last month.
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Airline Stocks Face Long Recovery
And there's hope that travel will rebound as coronavirus vaccines from Pfizer (PFE) and Moderna (MRNA) roll out. U.S. health officials expect Covid-19 vaccines to be available to the general public this summer.
Another tailwind for United stock is the return of the Boeing 737 Max. United plans to start flying its 737 Max jets during Q1 after the Federal Aviation Administration approved for the troubled jet to fly again in December.
But even with the vaccine, the airline industry has a long way to go to climb out from the depths of 2020. The International Air Transport Association doesn't see passenger traffic rebounding fully to 2019 levels until 2024.
"The early part of the year will be characterized by choppy demand recovery and a booking curve that remains compressed, followed by an inflection point, and finally a sustained demand recovery as customer confidence gains momentum, vaccinations become widespread and offices reopen," Delta President Glen Hauenstein said last week.
Follow Gillian Rich on Twitter @IBD_GRich for aviation news and more.
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