United Airlines Holdings (UAL.O) on Wednesday lifted its full-year profit outlook after posting the highest ever quarterly earnings on booming demand for international travel.
Its shares rose 2.4% in extended trading.
Ticket sales at U.S. carriers are soaring despite rising living costs as consumers cut spending on goods in favor of experiences. Last week, rival Delta Air lines (DAL.N) lifted its full-year profit outlook for the second time in less than a month and reported the highest quarterly earnings in its history.
International bookings are especially strong after the lifting of pandemic-related restrictions. Data from travel website Kayak, for example, shows searches by U.S.-based customers for summer travel to Europe are up 55% from last year.
Among U.S. airlines, higher-margin international travel is the most important to United, accounting for about 38% of its passenger revenue before the pandemic.
In the second quarter, international passenger revenue accounted for about 41% of the airline's total passenger revenue.
To capitalize on international travel demand, United announced earlier this week a second expansion of its Pacific coverage this autumn with new flights to Manila, Hong Kong, Taipei and Tokyo.
In the third quarter, the airline expects 10%-13% year-on-year increase in revenue with a 16% increase in capacity. It forecast adjusted earnings of $3.85 to $4.35 per share for the quarter, while the Wall Street consensus is $3.70.
It now expects an adjusted profit of $11 to $12 per share for 2023, compared with $10 to $12 estimated in January. That is well above analysts' consensus earnings estimate of $9.77 per share for 2023, according to a Refinitiv survey.
Adjusted second-quarter profit came in at $5.03 per share, above analysts' expectations for $4.03 according to Refinitiv data.
United will discuss the results on a call with analysts and investors on Thursday morning.
