United Airlines beats third quarter earnings estimates

United Airlines Holdings on Tuesday projected a current-quarter profit well above Wall Street estimates after reporting higher-than-expected third-quarter earnings due to a strong recovery in travel demand.

The company's shares rose nearly 7% to $39.73 in extended trading. The Chicago-based airline reported an adjusted profit of $2.81 per share for the third quarter, beating analysts' expectations by 53 cents, according to Refinitiv data. It was the company's best performance since the third quarter of 2019, just before the COVID-19 pandemic hit. For the fourth quarter through December, United said it expects an adjusted profit of $2.00 to $2.25 per share, a 24% to 25% increase in total revenue per available seat mile compared to the same quarter in 2019. That's more than double Wall Street estimates of 98 cents per share for the fourth quarter. Carriers are using 2019, the year before the pandemic, as a benchmark for their performance. "Despite growing concerns about the economic slowdown, the ongoing COVID recovery trends at United continue and we remain optimistic that we will continue to deliver strong financial results in the fourth quarter, 2023 and beyond," Chief Executive Officer Scott Kirby (NYSE:KEX) said in a statement. The company said it is confident of achieving its adjusted pre-tax margin target of 9% in 2023. United's upbeat outlook came days after rival Delta Air Lines Inc (NYSE:DAL) forecast a stronger-than-expected fourth-quarter profit on expectations that a thirst for travel will boost bookings, despite growing risks of an economic recession. US carriers are enjoying the strongest consumer demand in three years. The reopening of borders closed due to the COVID-19 pandemic and a strong US dollar are encouraging more Americans to travel overseas, while the reopening of offices is boosting corporate travel demand. This is helping United, which has more exposure to business and long-haul international travel than its competitors. In the third quarter, European passenger revenues increased 40% compared to the same period in 2019, accounting for 21% of United's total passenger revenues. Driven by demand, the company said it will increase transatlantic capacity by 30% next year compared to 2019. United will discuss the results in a call with analysts and investors on Wednesday morning. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!