Earnings Preview: UAL Corp.

UAL Corporation (UAUA) is expected to report Q3 earnings before market open Tuesday Oct. 21, with a conference call scheduled for 11:00 am ET.

Guidance

Analysts are looking for EPS of ($2.48) on revenue of $5.54B. The consensus range is ($2.69) to ($2.23) for EPS, and $5.46B to $5.59B for revenue, according to First Call.

Analyst Views

UAL Corporation stated on its Q2 conference call, it expects to see continued solid unit revenue growth in Q3. The company also announced further capacity cuts and the retirement of the entire B737 fleet as well as six B747s. In total, UAL will retire 100 aircraft and will reduce Q4 mainline domestic capacity 15.5% to 16.5% YoY. In conjunction with the capacity reductions, the company expects to reduce its workforce by approximately 7,000 by year-end 2009.

UBS upgraded UAL Corporation , along with most of the airline sector, on September 15, on the belief airline estimates are too low and will move higher. The firm upgraded UAL Corporation, Continental (CAL), AirTran Holdings (AAI), Allegiant Travel Company (ALGT), AMR Corporation (AMR), Delta Air Lines (DAL), US Airways Group (LCC) and Northwest Airlines (NWA) to Buy from Neutral and JetBlue Airways (JBLU) to Neutral from Sell.

Barclays stated on October 2, it sees major potential upside for the airlines given reduced fuel costs and restrained capacity. The firm's top picks are UAL Corporation and Delta/Northwest.