United Airlines stock turns red after another disappointing quarterly performance.
United Airlines Holdings Inc. (UAL) shares fell sharply last week after the Chicago-Illinois-based airline posted a wider-than-expected loss for the fourth quarter, marking the fourth straight quarterly loss as pandemic continue to hurt its business. UAL also warned that its capacity will stay low in the current quarter.
The company posted a loss of $1.9 billion, or $6.39 per share for the three-month period ended Dec. 31, as compared to a profit of $2.53 per share in the comparable period of 2019. Revenue plummeted 64 percent on a year-over-year basis to $3.41 billion.
Analysts were expecting United Airlines to report a loss of $6.13 per share on revenue of $3.42 billion.
The company expects its revenue to decline in a range of 65 to 70 percent in the first quarter as compared to the year-ago quarter. However, United also noted that faster Covid-19 vaccine distribution could result in quicker recovery. Nevertheless, the company is not expecting much improvement in the current quarter.
Speaking on the results, CEO Scott Kirby said in a statement, “aggressively managing the challenges of 2020 depended on our innovation and fast-paced decision making. But, truth be told is that pandemic and lockdowns, changed United Airlines forever.”
United plans to save $2 billion in annual costs through the next three years to ensure a quicker recovery. UAL was among the hardest hit airlines from the Covid-19 pandemic, which severely disrupted the global travel industry. Overall, United lost more than half its value over the past year due to low travel demand.
UAL shares fell nearly 6 percent on Thursday as investors were disappointed by its latest quarterly performance. If we look at the recommendations, most analysts have a “Hold” rating for UAL stock with an average price target of $48 per share.