What Happened?
Shares of airline company United Airlines Holdings (NASDAQ: UAL) fell 9.4% in the afternoon session after the company reported mixed third-quarter results that showed signs of rising cost pressures, overshadowing a strong earnings forecast.
The airline's adjusted earnings per share of $2.78 beat Wall Street's estimates, but its revenue of $15.23 billion, while up 2.6% year-over-year, came in just shy of expectations. Investor concern appeared to focus on declining profitability, as the company's operating margin fell to 9.2% from 10.5% in the same quarter last year. This pressure on profits was also reflected in its adjusted earnings per share, which declined from $3.33 in the prior year. Despite the airline providing an optimistic adjusted earnings forecast for the fourth quarter that was well above analyst consensus, investors seemingly weighed the current quarter's profitability issues more heavily.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy United Airlines? Access our full analysis report here.
What Is The Market Telling Us
United Airlines’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 1.8% on the news that the company announced it was expanding its transatlantic network and had received certification for its first aircraft equipped with Starlink internet service. United detailed plans to resume direct daily flights between Glasgow and Newark starting in May 2026, marking the return of the route after a seven-year break. This move was expected to bring significant economic and tourism benefits by connecting Scotland directly to a major U.S. hub. In separate positive news, the Federal Aviation Administration (FAA) certified the airline's first mainline Boeing 737-800 aircraft to be equipped with Starlink. The certification allowed the company to schedule its first commercial flight with the new high-speed internet service.
United Airlines is up 1.7% since the beginning of the year, but at $97.07 per share, it is still trading 12.2% below its 52-week high of $110.52 from January 2025. Investors who bought $1,000 worth of United Airlines’s shares 5 years ago would now be looking at an investment worth $2,841.
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