United Airlines Holdings, Inc. ($UAL) Earnings (Q3 FY22)

 United Airlines Holdings, Inc. ($UAL) Earnings and Opinion:


United Airlines is a company in the Industrials sector and operates in the Airlines industry. The company provides air transportations services in North America, Asia, Europe, Africa, the Pacific, the Middle East, and Latin America. United Airlines was incorporated in 1968 and is currently headquartered in Chicago, Illinois. The company made its debut on the public market in 2006.

United Airlines Earnings Results:

  • Revenue of $12.88B beating expectations of $12.72B
  • Adjusted Net Income of $927M beating expectations of $755.64M
  • Capital Expenditures of -$1.33B beating expectations of -$2.004B
  • Adj Diluted EPS of $2.81 beating expectations of $2.29
Opinion:
United Airlines is currently moving 7% higher in after hours. The company reported earnings after the market closed this afternoon. United thrived in this past quarter due to a rebound in corporate travel and leisure trips. The outlook for Q4 looks strong after an uneven summer traveling season, but we are seeing some sort of normalcy return. One major concern for the CEO is the climate change issue. He says that to solve climate change, fuel prices will have to rise. This will take a toll on the airline industry and will cause ticket prices to rise, causing unhappy consumers. One very solid note, was that the company is expected to exceed 2019 operating margin levels. The airline industry has taken a major hit in the pandemic, but were thriving in times before that. We are hoping, as investors, that travel will get back to that point again and cause the airliners to thrive. The financials proved to be steady with profitability proving to be pretty strong. Cargo saw a little bit of a miss, but that is little worries to investors. Cap Ex was way lower than expected, which could be a determinant to higher profitability. As far as valuation goes, EST P/E ratio is at 79.26, which is pretty high. P/B is at 3.07, which shows a little bit of growth, but is also a bit higher than peers. Free Cash Flow yield is at 10.48%, which is a solid metric and investors should be happy to see this. Overall, I think the stock is overvalued, but some growth is definitely destined to come. In my opinion, I think United Airlines is headed in the right direction. The profitability and FCF yield both stick out to me. I think some of the airliners may be better picks though. In terms of market share, United comes in at 4th, and you just don't here too much about them. I would dive deeper into valuation and see which airline you can pick up for the best valuation to determine which stock to put into your portfolio. Not saying to put it off your list, but keep a close eye on this one. 


*Information from Bloomberg and Yahoo Finance

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