United Continental Holdings Inc.
) showed a drop in consolidated traffic and capacity for December
2012, from the prior-year month.
DELTA AIR LINES (DAL): Free Stock Analysis
UNITED CONT HLD (UAL): Free Stock Analysis
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On a year-over-year basis, airline traffic - measured in revenue
passenger miles or RPMs, which implies revenue generated per mile
per passenger - moved down 4.0% to 16.2 billion. Consolidated
capacity (or available seat miles/ASMs) for the month was 19.7
billion, down 5.4% from the last month of 2011.
The load factor (percentage of seats filled by passengers)
improved slightly to 82.4% from 81.2% in December 2011. Passenger
revenue per available seat mile (PRASM) is estimated to increase
2.5-3.5% year over year.
For full year 2012, United Continental generated RPMs of 205.5
billion (down 1.0% year over year) and ASMs of 248.9 billion
(down 1.5% year over year), while load factor was 82.6%, up 40
Headquartered in Chicago, United Continental Holdings was formed
through the merger of United Airlines and Continental Airlines in
2010. The newly formed company became the world's biggest
The U.S. carrier is expected to report its fourth quarter
financial results on January 21, 2013. The Zacks Consensus
Estimates are a loss of 47 cents per share for the fourth quarter
and earnings per share of $1.65 for the full year.
United Continental currently retains a Zacks Rank #3 that implies
a Hold rating for a period of 1-3 months.
We expect the company to benefit from an industry leading growth
momentum, strong execution, competitive cost-structure, as well
as fleet and network optimization. Other positives for United
Continental include active hedging strategies and a strong
However, we expect these aspects to be overshadowed by the
concerns over escalating fuel prices, rising non-fuel expense,
competitive threats, new advertising policy, unionized workforce
and a sluggish global economy that might limit the upside
potential of the stock.