United Airlines lowered its 2026 adjusted earnings forecast to no more than $7.22 per share due to higher fuel prices, despite strong passenger demand and revenue growth.
United Airlines has reduced its profit forecast for 2026, citing rising fuel costs that are squeezing margins even as passenger demand remains strong. The carrier announced on Tuesday that it now expects adjusted earnings for the fourth quarter to range between 50 cents and $1.50 per share. This outlook falls short of the $1.76 per share Wall Street analysts had expected, according to estimates compiled by LSEG.
The revised fourth-quarter guidance implies that United’s full-year adjusted earnings for 2026 will not exceed $7.22 per share, even at the high end of the range. This represents a significant decrease from the company’s previous guidance issued in mid-July, when United projected full-year earnings of $9 to $11 per share.
The primary driver for the cut is the escalating cost of fuel. United stated it expects to pay an average of $4.80 a gallon for fuel in the fourth quarter, up from an average price of $3.90 a gallon in the third quarter. The company noted that a surge in fuel prices this year has added billions of dollars to airlines’ costs, eating into profits despite strong demand and driving up airfares.
Despite the lowered outlook, United reported solid results for the third quarter ended Sept. 30. Net income rose 8.5% from a year earlier to $1.03 billion, or $3.14 a share, compared with $949 million, or $2.90 a share, during the same period last year. Adjusting for one-time items, United reported net income of $833 million, or $2.54 a share, slightly below the $2.57 expected by analysts.
Revenue for the quarter increased 17.4% from a year earlier to $17.88 billion, compared with $15.23 billion the previous year. This figure nearly matched the market expectation of $17.9 billion. The company’s fuel bill rose close to 62% in the quarter from a year earlier to $4.84 billion.
Passenger demand appears resilient. United said passenger counts were up more than 2% from last year. Domestic passenger unit revenue rose 14.5% from a year earlier, while international unit revenue was up 17.4%, a trend the company described as a sign of higher fares.
United CEO Scott Kirby addressed the mixed results in an earnings release, emphasizing the company's operational resilience.
"Our employees met the challenge of our ever-changing environment and our results prove the resilience of focusing on building a brand-loyal airline for customers," Kirby said.
The cut to United’s profit outlook highlights the ongoing pressure rising fuel costs are placing on the aviation industry. While strong passenger demand and higher fares have boosted revenue, these gains are being offset by significant increases in operating expenses. The gap between United’s new guidance and Wall Street expectations signals potential headwinds for the sector as it enters the fourth quarter, with airlines balancing cost management against the need to maintain competitive pricing for travelers.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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