United Continental Holdings Inc. UAL – one of the leading U.S. airline companies –posted adjusted earnings of $1.52 per share in the first quarter of 2015, ahead of the Zacks Consensus Estimate of $1.41.
Quarterly total revenue declined 1% year over year to $8.6 billion but was above the Zacks Consensus Estimate of $8.58 billion. On a year-over-year basis, passenger revenues increased 0.5% while cargo revenues rose 15.8% mainly buoyed by higher volumes. Other revenues dropped 14.2% from the year-earlier quarter. Consolidated passenger revenue per available seat miles (PRASM or unit revenue) rose 0.4% year over year.
Total operating expenses, excluding fuel, profit sharing, special charges and third party expenses, declined 13.2% year over year. Consolidated unit cost or cost per available seat mile (CASM), excluding fuel, third-party business expenses and special items, increased by 0.2% year over year to 10.26 cents. Fuel costs declined 34.6% during the quarter (including realized hedging losses).
As of Mar 31, 2015, United Continental had $7 billion of unrestricted liquidity, out of which $1.35 billion was invested in revolving credit facilities. The carrier has generated $1 billion of free cash flow in the quarter under review.
Stocks to Consider
United Continental Holdings currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Southwest Airlines Co. LUV, JetBlue Airways Corp. JBLU and Hawaiian Holdings Inc. HA.
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