United Airlines Holdings Inc. UAL -4.36% reported higher profit in the latest quarter on stronger revenue and lower fuel costs, despite challenges from the grounding of Boeing Co. BA -3.33% ’s 737 MAX.
United’s fourth-quarter net profit rose to $641 million, or $2.53 a share, from $461 million, or $1.69 a share a year earlier. Excluding one-time charges, United’s adjusted earnings were $2.67 a share, 2 cents ahead of the $2.65 consensus among analysts polled by FactSet.
Revenue climbed 3.8% from the year earlier period to $10.89 billion.
United’s shares rose slightly in after-hours trading, after closing down 4.4% at $85.79 during the regular session.
The Chicago-based carrier has cut flights of 737 MAX aircraft from its schedules until June. The 737 MAX grounding, which began in March in the wake of a second fatal crash involving the plane within five months, has crimped airlines’ growth. United has 14 of the jets and was due to receive another 16 this year.
Boeing said Tuesday it would further delay its timetable for returning the 737 MAX to commercial service, adding that it doesn’t expect regulators to clear its return until at least the middle of the year. Airlines might have to push back plans for the plane’s return as a result.
United’s capacity grew 3.1% in the quarter, while its fuel costs declined 8.7% and nonfuel costs fell 1.3%.
For the quarter, United reported a 0.8% increase in passenger unit revenue, a closely watched metric of how much airlines make flying a passenger per mile.
Earlier this month, United warned that it would book a $90 million noncash charge in the fourth quarter after months of protests in Hong Kong crimped demand for travel there. United suspended flights from Chicago to Hong Kong earlier this year as the demonstrations against the Chinese government roiled the city and hurt tourism and business travel.
United said it expects adjusted earnings of 75 cents to $1.25 a share in the first quarter and unit revenue to be flat to up 2%.
Chief Executive Oscar Munoz said the carrier hit its full-year earnings target of $11 a share to $13 a share a year earlier than it planned, with adjusted earnings of $12.05 a share in 2019.
Mr. Munoz is scheduled to step down as chief executive in May to become United’s executive chairman. He is set to be succeeded by Scott Kirby, currently the airline’s president.
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