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UA Announces Q3 2017 Financial Results 18 Oct/ Conference Call 19 Oct

UA Announces Q3 2017 Financial Results 18 Oct/ Conference Call 19 Oct

Old Oct 18, 17, 12:35 pm
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UA Announces Q3 2017 Financial Results 18 Oct/ Conference Call 19 Oct

United Airlines Reports Third-Quarter 2017 Performance

CHICAGO, Oct. 18, 2017 /PRNewswire/ -- United Airlines (UAL) today announced its third-quarter 2017 financial results.

• UAL reported third-quarter net income of $637 million, diluted earnings per share of $2.12, pre-tax earnings of approximately $1.0 billion and pre-tax margin of 9.9 percent.
• Excluding special charges, UAL reported third-quarter net income of $669 million, diluted earnings per share of $2.22, pre-tax earnings of $1.0 billion and pre-tax margin of 10.4 percent.
• UAL repurchased $556 million of its common shares in the third quarter, bringing the year-to-date share repurchases to $1.3 billion.
• UAL delivered the best-ever third-quarter consolidated on-time departures in the history of the company, and employees earned $11 million in bonuses for operational performance.
"I could not be prouder of how our employees are raising the bar both in terms of serving our customers, as well as delivering record-setting operational performance. Not only did they manage to keep our operation moving through back-to-back natural disasters, but the United family banded together to help one another take part in one of the largest relief efforts in our airline's history," said Oscar Munoz, chief executive officer of United Airlines. "Even with the challenging environment in the third quarter, we continue to set the stage for United's long-term success and investing in the right strategy for our future."

During the quarter, the company cancelled approximately 8,300 flights as a result of severe weather in southeast Texas, Florida and parts of the Caribbean. The operational disruption reduced third-quarter pre-tax income by an estimated $185 million.

"Our employees continued to run a great operation and set new company records during the third quarter despite a challenging operational environment with an unprecedented series of storms. Our team set new records for on-time performance this quarter and had the fewest maintenance delays in over five years," said Scott Kirby, president of United Airlines. "Our company took part in relief efforts by operating 46 relief flights, delivering more than 1.7 million pounds of relief supplies and together with our customers and employees, raising and contributing more than $9 million to community and employee assistance. And thanks to a remarkable effort by the people of United, our Houston hub returned to full operations quicker than expected following Harvey."

Third-Quarter Revenue

For the third quarter of 2017, revenue was $9.9 billion, roughly flat year-over-year including an estimated $210 million loss of revenue from severe weather during the quarter. Third-quarter 2017 consolidated passenger revenue per available seat mile (PRASM) was down 3.7 percent compared to the third quarter of 2016. Cargo revenue was $257 million in the third quarter of 2017, an increase of 14.7 percent year-over-year primarily due to higher international freight volume.

Third-Quarter Costs

Operating expense was $8.8 billion in the third quarter, up 6.0 percent year-over-year. Consolidated unit cost per available seat mile (CASM) increased 3.0 percent compared to the third quarter of 2016 due largely to higher fuel and labor expense. Third-quarter consolidated CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 2.6 percent year-over-year, driven mainly by higher labor expense.

Liquidity and Capital Allocation

UAL generated $577 million in operating cash flow and ended the quarter with $6.3 billion in unrestricted liquidity, including $2.0 billion of undrawn commitments under its revolving credit facility. Capital expenditures were $1.1 billion in the third quarter.

In the third quarter of 2017, UAL raised $400 million of unsecured debt with an interest rate of 4.25 percent. The company contributed $160 million to its pension plans and made debt and capital lease principal payments of $222 million. In the quarter, UAL purchased $556 million of its common shares at an average price of $67.08 per share. As of Sept. 30, 2017, the company had approximately $553 million remaining under its existing share repurchase authority.

For the 12 months ended Sept. 30, 2017, the company's pre-tax income was $3.3 billion and return on invested capital (ROIC) was 14.9 percent.

"As we balance United's customer, employee and shareholder priorities going forward, a key focus remains returning cash to shareholders and we continued this during the third quarter, repurchasing $556 million of stock, which brings our year-to-date repurchase total to $1.3 billion," said Andrew Levy, executive vice president and chief financial officer of United Airlines. "Our balance sheet remains strong as evidenced by the 4.25 interest percent rate on the $400 million of unsecured debt raised during the quarter."

For more information on UAL's fourth-quarter 2017 guidance, please visit ir.united.com for the company's investor update.

Third-Quarter Highlights
Customer Experience
• New Customer Solutions Desk rolled out system-wide with a dedicated team to develop creative solutions to ensure customers reach their final destinations when their travel plans don't go as expected.
• Named the 2017 Airline of the Year in recognition of United Polaris business class experience at the International Flight Services Association (IFSA) Compass Awards.
• Unveiled a bag tracking feature in the United mobile app which allows customers to track their checked bags from check-in to arrival.
• Retrofitted the first Boeing 767-300ER aircraft with the United Polaris business class.
• United Polaris earned Global Traveler magazine's "Outstanding Innovations" award at the Global Traveler's fifth annual Leisure Lifestyle Awards.
• Became the first U.S.-based airline to offer a new option to check in and learn about flights without the touch of a finger through a new United skill for Amazon Echo and Amazon Echo Dot.
• Officially announced the final flight of the Boeing 747-400 as it retires, with the final voyage on Nov. 7, 2017 from San Francisco to Honolulu.

Network and Fleet
• Announced several new routes:

o New international nonstop service between Houston and Sydney, nonstop seasonal service to Mazatlan, Mexico, increased seasonal service to popular ski destinations and more options for Seattle-area customers with daily service between Paine Field and Denver and San Francisco.
o Announced new seasonal service between Denver and London; Newark, New Jersey, and Porto, Portugal and Reykjavik, Iceland; San Francisco and Zurich; and Washington Dulles and Edinburgh, Scotland. Additionally, announced expanded year-round service between Newark and Rome.
• Announced an agreement with Airbus to modify its A350 order resulting in a conversion of the model type from the A350-1000 to the A350-900, an increase in the order size from 35 to 45 aircraft and a deferral of the first delivery to late 2022.
• Took delivery of one Boeing 787-9 aircraft, four Boeing 737-800 aircraft and nine Embraer E175 aircraft.
• Finalized agreements to take delivery of two additional used Airbus A320 aircraft by the end of 2017.

Operations and Employees
• In response to the recent catastrophic weather events Harvey, Irma and Maria, United and its employees came together to keep the operation moving and take part in relief efforts:

o Operated 84 additional flights to provide additional seats and deliver needed relief supplies to impacted areas.
o Operated 46 relief flights, flying more than 2,000 evacuees out of impacted areas.
o Flew 767 flights with larger aircraft in order to carry more people and supplies. The combination resulted in over 13,600 additional seats to impacted areas.
o Delivered over 1.7 million pounds of relief supplies to aid the recovery in Texas, Florida, Puerto Rico and the Caribbean.
o Customers and employees, with supporting funds from the company, raised and contributed more than $9 million to community and employee assistance.
• Continued to improve the mobile tools used by employees, including the first release of the "in the moment" care app, and new functionality in flight attendant tools to better serve customers. These tools were the basis for the company receiving the CIO 100 award.
• Announced partnerships with three world-class design and apparel companies – Brooks Brothers, Tracy Reese and Carhartt – to inspire and create a new line of uniforms for the carrier's more than 70,000 front-line employees.

Links
Investor reports
Past results

Last edited by WineCountryUA; Oct 20, 17 at 10:06 am
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Old Oct 18, 17, 2:37 pm
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United Airlines to Hold Live Webcast of Third-Quarter 2017 Financial Results

October 06, 2017

CHICAGO, Oct. 6, 2017 /PRNewswire/ -- United Airlines will hold a conference call to discuss third-quarter 2017 financial results on Thursday, October 19, at 9:30 a.m. CT/10:30 a.m. ET. A live, listen-only webcast of the conference call will be available at ir.united.com. The company will issue its third-quarter financial results and fourth-quarter 2017 investor update after market close on Wednesday, October 18.

The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months.
link

Last edited by WineCountryUA; Oct 18, 17 at 2:38 pm Reason: reset time
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Old Oct 18, 17, 3:08 pm
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Considering the hurricane related cancellations - looks like a solid quarter.

http://www.marketwatch.com/story/uni...ons-2017-10-18

"The airline reported third-quarter net income of $637 million, or $2.12 a share, on revenue of $9.9 billion, which was basically even from the same quarter a year ago. After adjustments for special charges and tax effects, United claimed profit of $2.22 a share, down from $3.11 a share a year ago. Analysts on average expected adjusted earnings of $2.16 a share on revenue of $9.88 billion. United said it cancelled 8,300 flights in the quarter as the result of devastating hurricanes and other storms in Texas, Florida and the Caribbean, which reduced pre-tax income by an estimated $185 million. United said it set new company records for on-time performance in the quarter despite the difficulties. United stock declined less than 1% after the earnings were released, falling to $67.50 after closing with a 0.7% increase at $67.99."
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Old Oct 18, 17, 4:43 pm
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Originally Posted by HNLbasedFlyer View Post
Considering the hurricane related cancellations - looks like a solid quarter.
The Jeffie playbook continues to do wonders….

UAL’s profit: $637M
DAL’s profit: $1803M (nearly 3x, but who is counting?)

UAL’s capacity +3%, DAL’s capacity +1.6%

UAL’s Passanger revenue $8528M, it was $8602M in 2016
DAL’s Passanger Revenue $9399M, it was $9071M in 2016 [Just WOW!]

Resulting PRASM:

UAL: 12.17 c/mi (down 3.7%)
DAL 13.40 c/mi (up 1.9%

Had United matched DAL in PRASM this quarter, it would have had another $482M in profit.

In 2010 – before Jeffie’s war on elites and viewing the airline industry as a commodity business where cost cutting was the way to thrive, UAL’s PRASM was 13.57 c/mi, Delta’s was 13.54 c/mi. Had United – which put together the world’s biggest airline with the best assets and the best hubs – simply matched DAL’s PRASM, it would have 10.5% more revenue, or another $860M, this quarter.

but wait, its all the service disruptions, right? Nothing wrong with United as an airline?

UAL - lost $185M in revenue due to storms, DAL lost $120M

And the beating will continue next quarter. DAL is projecting PRASM growth of 2-4%, UAL is projecting PRASM will shrink by (1-3%)

Last edited by WineCountryUA; Oct 19, 17 at 1:00 am Reason: insensitive comment removed
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Old Oct 18, 17, 4:54 pm
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not a particularly impressive quarter. UA trailing the competition again.
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Old Oct 18, 17, 5:00 pm
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Best operational performance to Kirby means push back 2 feet at the designated time and continue to sit there, eventually arriving 45 minutes late.

I wish these guys would sit on SFO-PHL or vise versa and see how poor the operations are.
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Old Oct 18, 17, 5:18 pm
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I still think the marker should be on time arrivals more than on time departures. Would solve the close door push back 2 feet and sit syndrome to get an on time departure. I don't care when I leave as long as I get to my destination or connection point on time or early.
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Old Oct 18, 17, 5:46 pm
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Originally Posted by spin88 View Post
Had United matched DAL in PRASM this quarter, it would have had another $482M in profit.
Who cares. Wall Street didn't. UAL beat expectations.

Hmmm, last I checked Delta has different hubs, fly different planes, a lot of different routes - is a lot bigger.

The thread title was about an announcement of UAL Q3 earnings - not a comparison to a completely different airline.

UA is flush with cash - Only FT would complain about $670 million in a 3 month period. They look to me like they are thriving just fine.
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Old Oct 18, 17, 6:20 pm
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Solid quarter all considering. As a consumer what matters is performance, and UA continues to improve in that area. Run a good airline, and the financial results will take care of themselves.

Originally Posted by spin88 View Post
UALís profit: $637M
DALís profit: $1803M (nearly 3x, but who is counting?)
Might want to count again and try apples to apples next time.
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Old Oct 18, 17, 6:46 pm
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Originally Posted by HNLbasedFlyer View Post
UA is flush with cash - Only FT would complain about $670 million in a 3 month period. They look to me like they are thriving just fine.
Yet UA can't rollout polaris, are cutting back F meals, installing 10 across Y and scaling back E+ to 34" and E- to 30-31". Ummm if this is thriving i can't imagine the decisions if they start hemorrhaging.
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Old Oct 18, 17, 6:57 pm
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Originally Posted by Halo117 View Post
Yet UA can't rollout polaris, are cutting back F meals, installing 10 across Y and scaling back E+ to 34" and E- to 30-31". Ummm if this is thriving i can't imagine the decisions if they start hemorrhaging.
Right. I personally don't care whether UA hits earnings targets; I do care whether they serve me a decent meal in F on a four hour flight. On that metric, Q3 was a big fail.
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Old Oct 18, 17, 7:09 pm
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Originally Posted by Kacee View Post
Right. I personally don't care whether UA hits earnings targets; I do care whether they serve me a decent meal in F on a four hour flight. On that metric, Q3 was a big fail.
I don't either. However, its a good way to judge if management's approach at United from 2012-today - that non-decent meals in F, crappy coffee, tighter seats, no pillows, etc, would help improve the bottom line is right, or wrong.

IMHO its the second. Turning United into a third rate airlines as far as its product and customer service, has resulted in third rate earnings.
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Old Oct 18, 17, 7:26 pm
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Originally Posted by Halo117 View Post
Yet UA can't rollout polaris, are cutting back F meals, installing 10 across Y and scaling back E+ to 34" and E- to 30-31". Ummm if this is thriving i can't imagine the decisions if they start hemorrhaging.
All you listed are driven for the purpose of increasing earnings. One can make a strong case that UA hasn't cut enough over the years to give most customers less for more and a select group more for more.
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Old Oct 18, 17, 7:30 pm
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The coffee is now good. that fresh-poo junk is gone.

[Moderator edit.]

Delta is an airline that has full pricing /monopoly power over three rich corporate markets. That fuels their ability to do anything. That's what powers their profits.

United, while it has great hubs, competes with way more carriers in its biggest markets and is in way more competitive markets than Delta ever will be, which has an impact on yields and the fares they can charge. Delta does not face those same competitive pressures in the majority of its network. That's what explains the difference, not a meal or some coffee.

Oh - and by the way - how many of Delta's hubs were shut down for the better part of a week in Q3, with residual impacts on demand/ fares paid/ performance?

[Moderator edit.]

Originally Posted by spin88 View Post
I don't either. However, its a good way to judge if management's approach at United from 2012-today - that non-decent meals in F, crappy coffee, tighter seats, no pillows, etc, would help improve the bottom line is right, or wrong.

IMHO its the second. Turning United into a third rate airlines as far as its product and customer service, has resulted in third rate earnings.

Last edited by Ocn Vw 1K; Oct 18, 17 at 10:30 pm Reason: Edits per FT Rule 12, that members debate the topic and avoid personal attacks.
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Old Oct 18, 17, 7:41 pm
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Originally Posted by jasondc View Post
Delta is an airline that has full pricing /monopoly power over three rich corporate markets. That fuels their ability to do anything. That's what powers their profits.
That statement is not supported by the studies. In fact, UA has the most valuable hubs.

DL genuinely seems to be able to price their product higher due to market perception it is a better product.
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