United surges as outlook eases worry over Boeing deliveries
United Airlines Holdings Inc.’s shares rose the most in almost three months after the carrier forecast better-than-expected profit this quarter, tempering concerns that Boeing Co. aircraft delays and regulatory pressure will put expansion plans at risk. Adjusted earnings will be $3.75 to $4.25 a share in Q2, the Chicago-based airline said late Tuesday. That topped the $3.73 average of analyst estimates compiled by Bloomberg. The outlook shows how the airline is navigating a challenging start to the year, marked by a rash of safety incidents, the temporary grounding of some planes and the late delivery of aircraft it was counting on for expansion. A Federal Aviation Administration review has already begun to stunt near-term growth, with United recently delaying the start of two new routes. The airline now intends to take just 61 new narrowbody planes this year, down from a prior plan of 101 jets and an original expectation of as many as 183 aircraft. The change will cut United’s capital outlays by about $2.5b this year to $6.5b, the company said. “The bigger evolving story is more balanced capital allocation, which we believe will be self-reinforcing over time,” Duane Pfenningwerth, an Evercore ISI analyst, said in a note. “This is more than short-term delivery timing challenges.” The extra scrutiny from US authorities that led to the route delays also could limit the introduction of new planes into service, Bloomberg reported last month. United revamped its fleet plan “to better reflect the reality of what the manufacturers are able to deliver,” CEO Scott Kirby said in a statement. Kirby has been outspoken about the long-delayed regulatory certification of the 737 Max 10, Boeing’s largest single-aisle model. He recently told the manufacturer to stop producing the plane for United and pulled it from the airline’s 2024 flight plans. In March, he confirmed the carrier was in the market for rival Airbus SE’s A321neo jetliner, saying it’s “impossible to say when the Max 10 is going to get certified.”<br/>
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United surges as outlook eases worry over Boeing deliveries
United Airlines Holdings Inc.’s shares rose the most in almost three months after the carrier forecast better-than-expected profit this quarter, tempering concerns that Boeing Co. aircraft delays and regulatory pressure will put expansion plans at risk. Adjusted earnings will be $3.75 to $4.25 a share in Q2, the Chicago-based airline said late Tuesday. That topped the $3.73 average of analyst estimates compiled by Bloomberg. The outlook shows how the airline is navigating a challenging start to the year, marked by a rash of safety incidents, the temporary grounding of some planes and the late delivery of aircraft it was counting on for expansion. A Federal Aviation Administration review has already begun to stunt near-term growth, with United recently delaying the start of two new routes. The airline now intends to take just 61 new narrowbody planes this year, down from a prior plan of 101 jets and an original expectation of as many as 183 aircraft. The change will cut United’s capital outlays by about $2.5b this year to $6.5b, the company said. “The bigger evolving story is more balanced capital allocation, which we believe will be self-reinforcing over time,” Duane Pfenningwerth, an Evercore ISI analyst, said in a note. “This is more than short-term delivery timing challenges.” The extra scrutiny from US authorities that led to the route delays also could limit the introduction of new planes into service, Bloomberg reported last month. United revamped its fleet plan “to better reflect the reality of what the manufacturers are able to deliver,” CEO Scott Kirby said in a statement. Kirby has been outspoken about the long-delayed regulatory certification of the 737 Max 10, Boeing’s largest single-aisle model. He recently told the manufacturer to stop producing the plane for United and pulled it from the airline’s 2024 flight plans. In March, he confirmed the carrier was in the market for rival Airbus SE’s A321neo jetliner, saying it’s “impossible to say when the Max 10 is going to get certified.”<br/>
