United shares slide on outlook for passenger unit revenue

Shares of United Continental Holdings fell more than 5% Wednesday, a day after the airline forecast "disappointing" passenger unit revenue in Q3. After the market closed Tuesday, United said passenger unit revenue, which measures sales relative to flight capacity, would be flat in Q3 after rising 2.1% in Q2 from a year ago. "Investors were estimating 3Q17 unit revenue would be flat to up 2 (%); our estimate was up 1.5 (%), so the guidance is disappointing," Cowen analyst Helane Becker wrote in research note. Major US carriers have just begun to break free from a years-long negative streak in passenger unit revenue, posting increases in the metric after more than 2-1/2 years of depressed performance. United said unit operating costs, excluding fuel, rose more than 3% as rising labor costs weighed on the industry. Still, it posted adjusted earnings per share of $2.75, versus analysts' consensus forecast of $2.67. The solid financial results for the period ended on June 30 came despite consumer outrage over an April incident in which a paying passenger was dragged off a United flight. The company eventually settled with the passenger for an undisclosed amount and promised policy changes in hopes of winning back goodwill.<br/>