United Continental Q2’16 Earnings Preview: Higher Oil Prices & Declining PRASM To Weigh On Results
Key Trends:
- United revised its PRASM guidance from a decline of 6.5%-8.5% to 6.5%-7.5%, implying a small improvement in the foreign currency environment. However, the drop in passenger unit revenue continues to be significant, which is likely to weigh heavily on the airline’s June quarter revenue.
- Recovery in crude oil prices in the last three months is expected to cause the airline to exceed its fuel price guidance for the quarter. This will, in turn, pull down the legacy carrier’s operating margins.
- Restricted capacity growth will continue to support the airline’s bottom line, partially offsetting the negative impact of higher fuel cost.
- In a bid to attract more traffic, United is increasingly focusing on elevating the customer experience by introducing free snacks, coffee, and transforming airport clubs.
- Further, the company is further expanding its network, with services to destinations across Europe and Asia.
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Have more questions about United Continental (NYSE:UAL)? See the links below:
- Lower Unit Revenue And Higher Tax Expense Caused United Continental’s 1Q’16 Earnings To Drop Despite Fuel Cost Savings
- Currency Headwinds To Offset United Continental’s Fuel Cost Savings For 1Q’16
- How Will United’s Equity Value Be Impacted If The Crude Oil Prices Rebound To $100 Per Barrel By 2018?
- How Will United’s Equity Value Be Impacted If The Crude Oil Prices Average At $50 Per Barrel In 2018?
- How Will United’s Revenue And EBITDA Grow Over The Next Five Years?
- How Important Is United’s International Division For Its Overall Equity Value?
- What Is United’s Fundamental Value Based On 2016 Estimated Numbers?
- Why We Think United Continental Is Worth $65 Per Share?
- What Drove United’s Revenue And EBITDA Growth Over The Last Five Years?
- How Has United’s Revenue And EBITDA Composition Changed Over The Last Five Years?
- What Is United Continental’s Revenue And EBITDA Breakdown?
- How Has United Continental Utilized Its Cash Flows Over The Last Three Years?
- How Have Plummeting Crude Oil Prices Impacted United Continental’s Operating Margin?
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for United Continental
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