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Category: Stock Market and United Airlines
Date: 16 October 2019 Stock Price: $87.88 We take a look at the 3rd quarter earnings report of their 20219 fiscal year of United Airlines, a global airline company that has over 4900 flights departing flights on a daily basis to 358 different airports across 5 continents.
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About United Airlines
United's shared purpose is "Connecting People. Uniting the World." We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United Airlines and United Express operate approximately 4,900 flights a day to 358 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. United operates 788 mainline aircraft and the airline's United Express carriers operate 560 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 member airlines. For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL"
Overview of United Airlines' latest earnings report
Data below is reported for the latest quarter unless stated otherwise
- Revenue: $11.380 billion (up from $11.003 billion for the same quarter of the previous year)
- Revenue increased by 3.4% over the last 12 months
- Operating expenses: $9.907 billion (up from $9.816 billion for the same quarter of the previous year)
- Operating expenses increased by 0.9% over the last 12 months
- Diluted earnings per share: $3.99 (up from $3.05 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 256.4 million (down from 273.6 million for the same quarter of the previous year)
- Cash and cash equivalents: $2.959 billion
- Cash and cash equivalents per share: $11.54
- Cash and cash equivalents makes up 13.13% of United Airlines' market capital
- Cash and cash equivalents makes up 5.66% of United Airlines' total assets
- Accounts receivable: $1.67 billion
- Accounts receivable makes up 3.2% of United Airlines' total assets
- Goodwill: $4.523 billion
- Goodwill per share: $17.64
- Goodwill makes up 8.6% of United Airlines' total assets
- Stockholders equity of United Airlines' : $11.301 billion
- Stockholders equity per share: $44.079
- So United Airlines is trading at 1.99 times its stockholders equity per share. This is just outside the expected range of between 2 and 4 most firms tend to trade at
- Long term debt of United Airlines: $12.9 billion
- Long term debt makes up 31.5% of United Airlines total liabilities
- Cash generated from operations by United Airlines (for 9 months): $5.728 billion
- Cash generated from operations per share (for 9 months): $ 22.34
United Airlines's management commentary on the results and fiscal guidance
CHICAGO, Oct. 15, 2019 /PRNewswire/ -- United Airlines (UAL) today announced that it has achieved third quarter diluted earnings per share (EPS) of $3.99 and adjusted diluted EPS2 of $4.07, and raised its full year 2019 adjusted diluted EPS guidance, with a new range of $11.25 to $12.25.
"Thanks to the outstanding efforts of our employees, United extended our streak of expanding pre-tax margin on a quarterly basis. It provides us further confidence to raise our full year 2019 adjusted diluted EPS guidance, putting us ahead of pace to achieve our goal of $11 to $13 in adjusted diluted EPS by the end of 2020," said Oscar Munoz, CEO of United Airlines. "While headwinds affected the sector as a whole this quarter, United's team once again demonstrated a robust ability to overcome adverse cost pressure, managing to continue growing our network while investing in winning our customers' loyalty through smart enhancements to the United experience."
In 2019, United is focusing more than ever on its commitment to its customers, looking at every aspect of its business to ensure that the carrier keeps customers' best interests at the heart of its service. In addition to today's announcement, this year United:
"Thanks to the outstanding efforts of our employees, United extended our streak of expanding pre-tax margin on a quarterly basis. It provides us further confidence to raise our full year 2019 adjusted diluted EPS guidance, putting us ahead of pace to achieve our goal of $11 to $13 in adjusted diluted EPS by the end of 2020," said Oscar Munoz, CEO of United Airlines. "While headwinds affected the sector as a whole this quarter, United's team once again demonstrated a robust ability to overcome adverse cost pressure, managing to continue growing our network while investing in winning our customers' loyalty through smart enhancements to the United experience."
In 2019, United is focusing more than ever on its commitment to its customers, looking at every aspect of its business to ensure that the carrier keeps customers' best interests at the heart of its service. In addition to today's announcement, this year United:
- Announced that MileagePlus award miles will never expire
- Gave Economy customers a choice of complimentary snacks on domestic flights
- Made DIRECTV free for every customer on more than 200 aircraft
- Released a new version of the award-winning, most downloaded app in the airline industry
- Launched a new tool called ConnectionSaver, dedicated to improving the experience for customers with connecting flights
- Partnered with CLEAR on free or discounted memberships for MileagePlus members
- Announced PlusPoints, new upgrade benefits for MileagePlus Premier members
- And introduced products in its amenity kits made exclusively for the airline by luxury skincare line Sunday Riley
United Airlines (NASDAQ: UAL) stock price history
The image below, obtained from Google, shows the stock price history of United Airlines (NASDAQ: UAL) over the last 5 years. And it's been a very good time for United Airlines' stockholders. 5 years ago it was trading at around $44.70 and its currently trading at around $87.88 a stock. That's a massive return of 196.5% provided to United Airlines stockholders over the last 5 years. For better returns provided by United Airlines over 5 years than that of Delta Airlines.
The stock of United Airlines is trading at close to the midpoint between its 52 week high and 52 week low, which to us is a clear indication that the short term sentiment and momentum of the stock of United Airlines is neutral. Perhaps the latest results will be the catalyst for direction of United Airlines stock.
The stock of United Airlines is trading at close to the midpoint between its 52 week high and 52 week low, which to us is a clear indication that the short term sentiment and momentum of the stock of United Airlines is neutral. Perhaps the latest results will be the catalyst for direction of United Airlines stock.
Recent coverage of United Airlines
The extract below discusses the latest results from United Airlines as obtained from Thestreet,com
Shares of United Airlines (UAL - Get Report) are rising after hours Tuesday after the Chicago carrier reported third-quarter earnings ahead of analyst expectations and raised its full-year guidance. United Air reported GAAP earnings of $3.99 a share against $3.05 in the year-earlier quarter. Shares outstanding fell 6.3% to 256.4 million.
The airline reported adjusted earnings of $4.07 a share against the FactSet-derived analyst estimate of $3.95. Revenue came in at $11.38 billion against the estimate of $11.42 billion. And United raised its full-year 2019 adjusted EPS guidance to a range of $11.25 to $12.25 a share from its previous view of $10.50 to $12. Wall Street expects the company to report earnings of $11.85 a share for this year.
Read the full article here
Shares of United Airlines (UAL - Get Report) are rising after hours Tuesday after the Chicago carrier reported third-quarter earnings ahead of analyst expectations and raised its full-year guidance. United Air reported GAAP earnings of $3.99 a share against $3.05 in the year-earlier quarter. Shares outstanding fell 6.3% to 256.4 million.
The airline reported adjusted earnings of $4.07 a share against the FactSet-derived analyst estimate of $3.95. Revenue came in at $11.38 billion against the estimate of $11.42 billion. And United raised its full-year 2019 adjusted EPS guidance to a range of $11.25 to $12.25 a share from its previous view of $10.50 to $12. Wall Street expects the company to report earnings of $11.85 a share for this year.
Read the full article here
United Airlines (NASDAQ: UAL) latest stock valuation
So what is United Airlines' stock worth based on the release of their latest earnings report and the fiscal guidance provided by United Airlines? Based on the latest earnings results, and their fiscal guidance our valuation models provide a target (full value) price for United Airlines at $102 a United Airlines stock. We therefore believe that the stock is undervalued at its current price of $87.88
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target (full value) price which in this case is $102 Therefore we see a good entry point into United Airlines stock at $91.80 or below. Since United Airlines is trading at well below our suggested entry point into the stock we rate United Airlines as a buy.
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target (full value) price which in this case is $102 Therefore we see a good entry point into United Airlines stock at $91.80 or below. Since United Airlines is trading at well below our suggested entry point into the stock we rate United Airlines as a buy.
Next earnings release of United Airlines
The 4th quarter 2019 earnings release of United Airlines is expected mid January 2020