United Airlines Q3 Earnings Review: More Than Just Sector Tailwinds

Summary

  • United Airlines reported Q3 results on Tuesday and confirmed a rosy scenario of robust demand and strong pricing power.
  • The international segment performed superbly, as I expected, while capacity constraints and operating costs looked better than expected.
  • The airline sector is a high-risk play, but I think that UAL will be a winner relative to most of its US-based peers.
  • Looking for a helping hand in the market? Members of EPB Macro Research get exclusive ideas and guidance to navigate any climate. Learn More »

United Airlines Boeing 787 Dreamliner

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If there has been an early winner in the current Q3 earnings season, it is probably the airline space (JETS). Since the start of October, US-based air carrier stocks have roared back to life (see chart below), after about 18

Chart

Airline peer comp: Q2 International Revenues bar chart

DM Martins Research, data from airlines' investor relations pages

Legacy US airline comp: net debt to asset chart

DM Martins Research, data from companies' investor relations pages

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This article was written by

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Tracking Economic Inflection Points To Guide Your Asset Allocation Strategy

Daniel Martins is a Napa, California-based analyst and founder of independent research firm DM Martins Research. The firm's work is centered around building more efficient, easily replicable portfolios that are properly risk-balanced for growth with less downside risk.

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Daniel is the founder and portfolio manager at DM Martins Capital Management LLC. He is a former equity research professional at FBR Capital Markets and Telsey Advisory in New York City and finance analyst at macro hedge fund Bridgewater Associates, where he developed most of his investment management skills earlier in his career. Daniel is also an equity research instructor for Wall Street Prep.

He holds an MBA in Financial Instruments and Markets from New York University's Stern School of Business.

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On Seeking Alpha, DM Martins Research partners with EPB Macro Research, and has collaborated with Risk Research, Inc.

DM Martins Research also manages a small team of writers and editors who publish content on several TheStreet.com channels, including Apple Maven (thestreet.com/apple) and Wall Street Memes (thestreet.com/memestocks).

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in DAL, UAL over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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