The plummeting price of fuel has helped United’s bottom line but hurt revenue from corporate energy clients near Houston’s George Bush Intercontinental Airport, where United is the largest airline. The most bearish price estimate is seen at $60, while the stock is expected to touch a price of $98 over the next one year.
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Key Stats: PRASM (on a consolidated basis) in the fourth quarter declined 6% and yield fell 7.2 % on a year over year basis.
United also announced that later this year it will begin selling new “entry-level” fares for the most cost-conscious passengers.
This month, United introduced bundled fare offerings for travelers buying Economy Plus seats, vice chairman and chief revenue officer Jim Compton said.
Even with the slide in fares, the big carriers are confident enough to order new planes. Acadian Asset Management now owns 18,466 shares of the company’s stock valued at $1,057,000 after buying an additional 16,828 shares in the last quarter. The company reported $2.54 EPS for the quarter, missing analysts’ consensus estimates of $2.58 by $0.04.
Southwest said Thursday that profit excluding one-time items like fuel-hedging costs was 90 cents per share, matching the expectations of analysts surveyed by Zacks Investment Research and FactSet. Total fuel cost of $213 million for October, November and December, and $954 million for the year, was one-third lower than in 2014. Only “other” revenue – things like bag fees, ticketing fees, and money from the MileagePlus loyalty program – grew; up 11 percent.
“We improved our operational performance, continued to invest in our products and services and achieved record financial performance”, acting CEO Brett Hart said in a statement.
United Continental Holdings (NYSE:UAL) last released its quarterly earnings results on Thursday, January 21st. The Dallas company saved $369 million, or 32 percent, on fuel, and projected it could cut fuel spending another $500 million this year if energy prices remain at current levels. Including special items, UAL reported full-year net income of $7.3 billion.
The airline posted revenue of $9.04 billion in the period.
The entire airline industry is benefiting from the dramatic fuel price drop.
Southwest said profits almost tripled in the fourth quarter to $536 million.
Shares of United closed Wednesday at $45.12, with a consensus analyst price target of $79.64 and a 52-week trading range of $42.17 to $74.52.
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Yahoo FinanceUnited Airlines shares so far this year It’s partly because this continuation of a trend that United has flagged earlier.
