United Airlines' third quarter results reflected stable operational execution and balanced demand trends, with management crediting the company's focus on brand loyalty and premium customer experience for driving performance. CEO Scott Kirby emphasized that investments exceeding $1 billion annually in customer products and services are designed to win and retain loyal customers across all cabin classes. Management highlighted resilient operations despite macro volatility, with President Brett Hart noting, “The third quarter marked our lowest rate of cancellations for any third quarter in company history.”
Is now the time to buy UAL? Find out in our full research report (it’s free for active Edge members).
United Airlines (UAL) Q3 CY2025 Highlights:
- Revenue: $15.23 billion vs analyst estimates of $15.3 billion (2.6% year-on-year growth, in line)
- Adjusted EPS: $2.78 vs analyst estimates of $2.68 (3.8% beat)
- Adjusted EBITDA: $2.05 billion vs analyst estimates of $2.05 billion (13.5% margin, in line)
- Adjusted EPS guidance for Q4 CY2025 is $3.25 at the midpoint, above analyst estimates of $2.92
- Operating Margin: 9.2%, down from 10.5% in the same quarter last year
- Revenue Passenger Miles: 73.77 billion, up 4.22 billion year on year
- Market Capitalization: $32.41 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From United Airlines’s Q3 Earnings Call
- Catherine O'Brien (Goldman Sachs): Asked about the impact of industry main cabin supply changes on United's margin gap between main cabin and premium seats. CEO Scott Kirby explained that brand loyalty and differentiated product offerings will sustain higher margins, even as commoditized segments normalize.
- Jamie Baker (JPMorgan): Inquired whether premium leisure yields are now consistently exceeding corporate yields across United’s network. CCO Andrew Nocella confirmed the trend domestically and expects it to accelerate, but noted that corporate demand still leads on global long-haul routes.
- Andrew Didora (Bank of America): Questioned the rationale behind Latin America capacity growth given underperformance. Nocella acknowledged disappointing results but outlined plans to reduce non-core capacity and focus on profitable core routes in Houston.
- Sheila Kahyaoglu (Jefferies): Sought clarification on United’s annual margin improvement targets and the drivers behind sustained expansion. Kirby cited brand loyalty, premium product momentum, and operational resilience as key factors.
- Duane Pfennigwerth (Evercore ISI): Asked for details on advanced bookings and Atlantic revenue outperformance. Nocella reported a head start in Q4 bookings and strategic capacity placement to maximize transatlantic profitability.
Catalysts in Upcoming Quarters
The StockStory team will be watching (1) how United Airlines executes its shift in seasonal capacity deployment, especially the early ending of peak summer schedules and reduction of Red Eye flights; (2) the pace of premium cabin and international demand growth, particularly as new aircraft and upgraded onboard experiences roll out; and (3) the impact of loyalty program enhancements on customer retention and revenue. Progress in labor negotiations and fleet modernization will also be important milestones.
United Airlines currently trades at $100.12, down from $104.18 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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