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United Airlines Holdings Inc. stock fell in premarket trading Thursday after the carrier warned that higher fuel costs and capacity constraints are expected to weigh on near-term results, even as it reported second-quarter earnings and revenue above Wall Street estimates.
United reported second-quarter revenue of $17.67 billion, topping the analyst consensus estimate of $17.62 billion, according to Benzinga Pro. Adjusted earnings came in at $1.99 per share, ahead of expectations of $1.87 per share.
Second-quarter capacity increased 3.5% year over year. Cost per available seat mile (CASM) rose 15.2%, while CASM excluding fuel (CASM-ex) increased 6.1%.
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The airline said its average fuel price was $4.19 per gallon during the quarter. Since early July, fuel costs have increased by another $575 million, which the company said will reduce third-quarter adjusted earnings by about $1.12 per share.
United ended the quarter with $19.6 billion in liquidity and prepaid about $1 billion of higher-cost debt.
United guided for third-quarter adjusted earnings of $2.50 to $3.50 per share. The company expects full-year 2026 adjusted earnings to be in the range of $9 to $11 per share, versus prior guidance of $7 to $11 per share. Current analyst estimates call for $10.36 per share. United also said it expects adjusted capital expenditures to be $7.5 billion this year.
The company said adjusted capital expenditures are expected to total about $7.5 billion in 2026. It added that earnings could exceed the upper end of its guidance range if fuel prices return to early July levels.
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United expects third- and fourth-quarter total revenue per available seat mile (TRASM) growth to exceed second-quarter levels. The airline also expects to recover 80% to 90% of higher fuel costs in the third quarter and fully recover those costs by the fourth quarter, despite projecting nearly $6 billion in additional fuel expense this year versus its initial outlook.
The carrier introduced a new guidance framework tied to current fuel prices, using an assumed third-quarter average fuel price of $3.69 per gallon based on the July 14 Gulf Coast Jet forward curve.
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