A United Airlines Boeing 737 Max 9 aircraft lands at San Francisco International Airport on March 13, 2019 in Burlingame, California.
Justin Sullivan | fake images
united airlines on Monday forecast a first-quarter loss due to the FAA's grounding of boeing 737 Max 9 planes this month after a part exploded during a Alaska Airlines flight operated with that type of aircraft.
United expects to post an adjusted loss of between 35 cents and 85 cents per share for the first three months of the year. The forecast is the first indication to investors of the financial damage caused by the Federal Aviation Administration's grounding of the planes, issued a day after Alaska Airlines Flight 1282 on Jan. 5.
United has 79 aircraft in its fleet, more than any other airline, followed by Alaska. United said Monday that it expects the planes to remain grounded until Jan. 26.
Both airlines canceled hundreds of flights this month while planes remain grounded for inspection. The most common 737 Max 8, found in United fleets, American and South westis not affected by the grounding command.
United's warning for the first quarter comes after a relatively strong holiday period.
For the last three months of 2023, United posted net income of $600 million, on revenue of $13.63 billion. Adjusting for one-time items, United's fourth-quarter earnings of $2 per share fell from $2.46 a year earlier.
Here's what United reported in the fourth quarter compared to what Wall Street expected, according to average estimates compiled by LSEG, formerly known as Refinitiv:
- Adjusted earnings per share: $2.00 vs. expected $1.70 per share
- Total income: $13.63 billion vs. $13.54 billion expected
The airline touted strong travel demand late last year and strong bookings so far this year. For the full year 2024, United forecast adjusted earnings of between $9 and $11 per share, within analyst estimates.
United executives will hold an earnings conference call at 10:30 a.m. ET on Tuesday, when they will likely face questions about Boeing's compensation for the service suspension. Alaska Airlines reports before the market open on Thursday, and Boeing is scheduled to report results on January 31.
