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United Airlines Holdings Inc’s stock rallied 10 per cent in morning trade on Wednesday after the carrier forecast upbeat profit for the second quarter.
The company posted strong first quarter results despite a $200 million hit over Boeing’s safety crisis.
Excluding special items, the airline lost 15 cents per share.
United Airlines said on Tuesday that it lost $124 million in the first quarter, which it blamed on a three-week grounding of all Boeing 737 Max 9s after a panel blew off an Alaska Airlines Max jetliner in January.
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Its revenue rose nearly 10 per cent, to $12.54 billion, beating the Wall Street forecast of $12.45 billion.
For the second quarter, the airline expects an adjusted profit of $3.75 to $4.25 per share.
United also maintained its full year profit outlook of $9 to $11 a share.
Chicago-based United Airlines has cut its annual delivery estimate for new Boeing aircraft by 25 per cent as the planemaker has been grappling with production and certification delays.
United CEO Scott Kirby during an interview with CNBC on Wednesday said that he was “confident that the 787 Dreamliner is a safe airplane”.
The airline now intends to take just 61 new narrowbody planes this year, down from a prior plan of 101 jets and an original expectation of as many as 183 aircraft. The change will cut United’s capital outlays by about $2.5 billion this year to $6.5 billion, the company said.
United revamped its fleet plan “to better reflect the reality of what the manufacturers are able to deliver,” chief executive officer Scott Kirby said in the statement.
United Airlines also said it will convert some Max 10 orders to the smaller Max 9 variant.
It now expects to take an average of 100 narrowbody aircraft each year from 2025 through 2027.
Shares of Delta Air Lines and American Airlines also rose by about 3 per cent and 4 per cent, respectively, on United Airlines’ earnings forecast that indicated strong travel demand.
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Published: 17 Apr 2024, 09:44 PM IST
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