United Airlines posted quarterly earnings that beat estimates on strong domestic travel demand and the second-largest U.S. carrier raised the low end of its full-year guidance.
United’s second-quarter net income jumped 54% to $1.05 billion even though it was forced to cancel flights due to the grounding of Boeing 737 MAX planes. On an adjusted basis, it earned $4.21 a share, beating analysts’ expectations of $4.09 a share.
Revenue rose close to 6% from a year ago to $11.4 billion, slightly above the $11.36 billion analysts had forecast. Passenger unit revenue, a key airline industry metric, rose 2.5% year over year.
“By once again delivering strong EPS over the last three months, top-tier results are now the expectation, not the exception for United,” CEO Oscar Munoz said in a news release.
United has now reported better-than-expected earnings for six straight quarters. It said the continued successful implementation of its strategy of connecting more flights between its mid-Continent hub airports and smaller cities also helped its bottom line.
Total fuel costs decreased slightly, despite a 4% increase in fuel volume, as crude oil prices pulled back from mid-2018 highs.
For the full year, United raised the low-end of its profit forecast to $10.50 to $12 per share from an estimate of as low as $10 a share. “Strong domestic demand for flights and fuel prices that are 5% lower than a year ago are driving industry profits,” The Wall Street Journal said.
United also announced that it had signed an agreement to purchase 19 used Boeing 737-700 aircraft with deliveries expected beginning in December as it seeks to meet growing demand with the MAX planes still grounded.
The airline has received 14 of the jets, with an additional 16 due to arrive by the end of the year and 28 more in 2020.