United’s Profit Tops Estimates With Boost From Stronger Airfaresby
United Continental Holdings Inc.’s fourth-quarter profit exceeded expectations as a rebound in pricing power took hold across the airline industry.
Earnings excluding certain items were $1.78 a share, compared with the average analysts’ estimate of $1.75 a share. Revenue rose less than 1 percent to $9.05 billion, the Chicago-based airline said in a statement Tuesday. Analysts had predicted $9.06 billion, according to the average of estimates compiled by Bloomberg.
Analysts have been bolstering their predictions for United in recent weeks as fares strengthened and demand picked up for pricey tickets booked shortly before travel. As recently as a month ago, the average profit estimate was just $1.33 a share. Airlines have boosted fares somewhat in recent months as they’ve cut back on the growth in seats and flights, bringing supply more in line with demand.
That’s prompted carriers and analysts to predict that declines in passenger revenue for each seat flown a mile, an industry benchmark, will level off after more than a year of declines. United’s unit revenue, as the figure is known, slipped 1.6 percent in the fourth quarter from a year earlier, the smallest decline since rising slightly in the first quarter of 2015.