It has been about a month since the last earnings report for United Airlines (UAL). Shares have added about 6.9% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is United due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Earnings Beat in Q1
United Airlines' first-quarter 2026 adjusted earnings per share (excluding 95 cents from non-recurring items) of $1.19 surpassed the Zacks Consensus Estimate of $1.08 and increased 30.8% on a year-over-year basis. The reported figure lies within the guided range of $1.00-$1.50.
Operating revenues of $14.6 billion outpaced the Zacks Consensus Estimate of $14.3 billion and increased 10.5% year over year. Passenger revenues (which accounted for 90.1% of the top line) increased 11% year over year to $13.1 billion. UAL flights transported 42,486 passengers in the first quarter, up 4.1% year over year.
Cargo revenues fell 1.6% year over year to $422 million. Revenues from other sources rose 10.5% year over year to $1.02 billion.
Despite challenges such as the $340 million increase in fuel expense from the year-ago reported quarter, UAL’s diverse revenue sources contributed to its first-quarter results. These include premium revenues, which increased 14% year over year, loyalty revenues, which rose 13% year over year and revenue from Basic Economy, which increased 7% year over year. Business revenue also remained strong, up 14% year over year for the first quarter. The first quarter was United Airlines' highest-revenue first quarter ever, with positive PRASM growth in every region.
Below, we present all comparisons (in % terms) with the first quarter of 2025 figures unless otherwise stated.
Airline traffic, measured in revenue passenger miles, grew 6.5%. Capacity, measured in available seat miles, expanded 3.4%. Since traffic outpaced capacity expansion, the consolidated load factor (percentage of seats filled by passengers) rose 2.4 points on a year-over-year basis to 81.6%.
Consolidated passenger revenue per available seat mile (a key measure of unit revenues) inched up 7.4% year over year. Total revenue per available seat mile increased 6.9% year over year. The average yield per revenue passenger mile rose 4.2% year over year to 20.77 cents. The average aircraft fuel price per gallon grew 9.9% year over year to $2.78. Fuel gallons consumed were up 2.4% year over year.
Operating expenses (on a reported basis) increased 8% year over year to $13.6 billion. Consolidated unit cost or cost per available seat mile, excluding fuel, third-party business expenses, profit-sharing and special charges, inched up 5.9% year over year to 13.95 cents.
UAL exited the first quarter of 2026 with cash and cash equivalents of $7.86 billion compared with $5.94 billion at the prior-quarter end. Long-term debt, finance leases and other financial liabilities were $21.9 billion compared with $20.5 billion at the end of the prior quarter. UAL repurchased almost $27 million of shares in the first quarter of 2026.
Outlook
For second-quarter 2026, UAL anticipates adjusted EPS between $1.00 and $2.00. For 2026, UAL now anticipates adjusted EPS between $7.00 and $11.00 compared with the prior guided view of $12.00-$14.00. Adjusted total capital expenditures for 2026 are still anticipated to be less than $8 billion.
United Airlines expects to recover 40-50% of the fuel price increase in the second quarter, 70-80% of the fuel price increase in the third quarter and 85-100% of the fuel price increase in the fourth quarter of 2026 through its revenues.
The average aircraft fuel price is expected to be around $4.30 per gallon in the second quarter of 2026. Based on the current fuel environment, UAL is expecting year-over-year capacity to be flat to up almost 2% in both the third and fourth quarters of 2026.
UAL’s adjusted earnings per share guidance for the second quarter and full-year 2026 assumes the Gulf Coast jet forward curve as of April 17, 2026. Fuel remains highly volatile. If prices remain on a downward trend, UAL anticipates being in the upper half of the adjusted diluted earnings per share guidance range for each of the second quarter and full year 2026, and if fuel re-escalates, UAL anticipates being in the lower half of the adjusted diluted earnings per share for both the second quarter and full year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, United has a strong Growth Score of A, a score with the same score on the momentum front. Following the exact same course, the stock has a grade of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise United has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
United belongs to the Zacks Transportation - Airline industry. Another stock from the same industry, Delta Air Lines (DAL), has gained 8.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.
Delta reported revenues of $14.2 billion in the last reported quarter, representing a year-over-year change of +1.1%. EPS of $0.64 for the same period compares with $0.46 a year ago.
Delta is expected to post earnings of $1.49 per share for the current quarter, representing a year-over-year change of -29.1%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.9%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Delta. Also, the stock has a VGM Score of B.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
