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Category: Stock Market and United Airlines
Date: 22 January 2020 Stock Price: $84.43 We take a look at the 4th 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' 4th quarter 2019 earnings report
Data below is reported for the latest quarter unless stated otherwise
- Revenue: $10.880 billion (up from $10.491 billion for the same quarter of the previous year)
- Revenue increased by 3.8% over the last 12 months
- Operating expenses: $10.027 billion (up from $9.856 billion for the same quarter of the previous year)
- Operating expenses increased by 1.7% over the last 12 months
- Net earnings: $641 million (down from $461 million for the same quarter of the previous year)
- Diluted earnings per share: $2.53 (up from $1.69 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 254.3 million (down 7.1% from 272.7 million for the same quarter of the previous year)
- Cash and cash equivalents: $2.762 billion
- Cash and cash equivalents per share: $10.86
- Cash and cash equivalents makes up 12.9% of United Airlines' market capital
- Cash and cash equivalents makes up 5.24% of United Airlines' total assets
- Accounts receivable: $1.364 billion
- Accounts receivable makes up 2.59% of United Airlines' total assets
- Goodwill: $4.523 billion
- Goodwill per share: $17.78
- Goodwill makes up 8.6% of United Airlines' total assets
- Stockholders equity of United Airlines' : $11.531 billion
- Stockholders equity per share: $45.34
- So United Airlines is trading at 1.86 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: $13.145 billion
- Long term debt makes up 34.9% of United Airlines total liabilities
- Cash generated from operations by United Airlines (for full fiscal year): $6.909 billion
- Cash generated from operations per share (for full fiscal year): $ 27.16
United Airlines's management commentary on their 4th quarter earnings report
CHICAGO, Jan. 21, 2020 - United Airlines (UAL) today announced it reached its 2020 goal -- first announced in January 2018 -- to achieve adjusted diluted earnings per share (EPS) target of $11 to $13 a full year ahead of schedule. The company also achieved full year pre-tax margin growth of 2.6 points, which is expected to outpace its largest competitors for 2019
2019 highlights for United Airlines:
2019 highlights for United Airlines:
- Flew most revenue passengers in company history
- Set new company record for most mainline departures with nearly 800,000 departures.
- Number one in on-time departures at all hubs with direct competitors -- Chicago, Denver and Los Angeles.
- Hosted Backstage 2019, which brought all 25,000 flight attendants to Chicago for an event which was designed to underscore the important role flight attendants play in delivering great service.
- Profit sharing for 2019 was on average 45 percent higher per participating employee year-over-year.
- Launched Aviate, a new pilot recruiting and development program and career website to establish a more structured career path to becoming a United pilot.
- Hired nearly 9,000 aviation professionals in well paying careers with great benefits in 2019.
- Repurchased $216 million of its common shares in the fourth quarter of 2019, at an average purchase price of $88.95 per share, bringing share repurchases for full year 2019 to $1.6 billion.
"2019 was a great year for our United team -- highlighted by achieving our $11 to $13 adjusted EPS target a full year ahead of schedule," said Oscar Munoz, CEO of United Airlines. "With a fourquarter streak of expanding profit margins, when all the results are in we expect our full year 2019 pretax margin growth to be the highest amongst our largest competitors. When I look at United's fundamental strength, I could not be prouder of what we've accomplished in such a short time. This is the New United we set out to build more than four years ago. As we embark on a new year and decade, I believe the outlook for United's future has never been brighter."
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 pretty average time for United Airlines' stockholders. 5 years ago it was trading at around $73.10 and its currently trading at around $84.47 a stock. That's a ok return of 15.5% provided to United Airlines stockholders over the last 5 years.
The stock of United Airlines is trading at closer to its 52 week low of $77.02 than it is to its 52 week high high of $96.03, which to us is a clear indication that the short term sentiment and momentum of the stock of United Airlines is negative.
The stock of United Airlines is trading at closer to its 52 week low of $77.02 than it is to its 52 week high high of $96.03, which to us is a clear indication that the short term sentiment and momentum of the stock of United Airlines is negative.
Recent coverage of United Airlines
The extract below discusses the latest results from United Airlines as obtained from Thestreet,com
United Airlines Holdings (UAL) - Get Report reported that fourth-quarter net income per share climbed 50% on 3.8% higher revenue. At the parent of United Airlines fourth-quarter earnings reached $2.53 a share from $1.69 in the year-earlier quarter. The latest adjusted earnings were $2.67 a share. Shares outstanding fell 7.1% to 253.4 million.
Revenue rose to $10.89 billion from $10.49 billion. A survey of analysts by FactSet was looking for earnings of $2.56 a share, or an adjusted $2.65, on revenue of $10.89 billion. UAL's operating-profit margin widened 1.8 percentage points to 7.9%. The pretax profit margin was 2.5 percentage points fatter at 7.8%.
Fuel costs dropped 5.5% in the quarter. Operating expense overall edged up 1.7%. On Jan. 7 UAL said it expected to report a $90 million fourth-quarter charge associated with its Hong Kong routes. The company said the charge stemmed from its annual review of intangible assets. It reflected lower demand for the Hong Kong market and a resulting revenue decline at the unit
Read the full article here
United Airlines Holdings (UAL) - Get Report reported that fourth-quarter net income per share climbed 50% on 3.8% higher revenue. At the parent of United Airlines fourth-quarter earnings reached $2.53 a share from $1.69 in the year-earlier quarter. The latest adjusted earnings were $2.67 a share. Shares outstanding fell 7.1% to 253.4 million.
Revenue rose to $10.89 billion from $10.49 billion. A survey of analysts by FactSet was looking for earnings of $2.56 a share, or an adjusted $2.65, on revenue of $10.89 billion. UAL's operating-profit margin widened 1.8 percentage points to 7.9%. The pretax profit margin was 2.5 percentage points fatter at 7.8%.
Fuel costs dropped 5.5% in the quarter. Operating expense overall edged up 1.7%. On Jan. 7 UAL said it expected to report a $90 million fourth-quarter charge associated with its Hong Kong routes. The company said the charge stemmed from its annual review of intangible assets. It reflected lower demand for the Hong Kong market and a resulting revenue decline at the unit
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 $109.70 a United Airlines stock. We therefore believe that the stock is undervalued at its current price of $84.47
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 $109 Therefore we see a good entry point into United Airlines stock at $98.70 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 $109 Therefore we see a good entry point into United Airlines stock at $98.70 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
It is expected that United Airlines will release their 1st quarter 2020 earnings release in mid April 2020