United Airlines Earnings Beat Estimates. Why the Stock Is Dropping.

United Airlines stock is up around 2% in 2025 in what’s been a turbulent year for the sector. (Getty Images)

Key Points

• United Airlines reports third-quarter adjusted earnings of $2.78 a share, exceeding analysts’ expectations of $2.65.
• Third-quarter revenue reaches $15.23 billion, a 2.6% increase from a year ago, but fell short of the $15.33 billion anticipated.
• The company forecasts fourth-quarter adjusted earnings between $3 and $3.50 a share, surpassing the $2.87 a share expected.

United Airlines’ shares fell Thursday after the carrier beat expectations for third-quarter earnings and offered a better-than-expected outlook but third-quarter revenue fell shy of expectations.

United reported third-quarter adjusted earnings of $2.78 a share, beating its own guidance. Analysts surveyed by FactSet were expecting earnings of $2.65 a share.

Revenue of $15.23 billion was 2.6% higher than $14.84 billion in the third quarter of 2024, but missed expectations for $15.33 billion.

Net income of $949 million was down 1.7% from the $965 million in the year-ago quarter.

United stock declined 4.3% on Thursday. Shares dropped early in Thursday’s session, swung to a gain during the company’s earnings call, and then turned lower again. Coming into Thursday, the stock has risen 7.2% this year and gained 44.5% over the past 12 months.

United said its results show how it has thrived during an “economically volatile year.” Third quarter loyalty revenue rose 9%. Its premium cabin revenue during the quarter rose 6% from a year ago, while basic economy revenue rose 4%, and cargo revenue rose 3%. United said the “great momentum” is continuing in the current fourth quarter, and that it expects the fourth quarter to have the highest quarterly operating revenue in company history.

United expects fourth-quarter adjusted earnings of $3.00 to $3.50 a share, above expectations for $2.87 a share, according to FactSet.

United increased its capacity by 7.2% compared with last year’s third quarter, but total revenue per seat mile, an important metric of profitability, declined 4.3% from the third-quarter 2024. Cost per available seat mile declined 2.8%, and its average fuel price fell 5.1%, to $2.43 a gallon.

The carrier said it is making significant investments in winning and keeping its customers, including more than $1 billion on enhancements including Starlink installations, seatback screens for in-flight entertainment, and 25% more on food. It plans to invest another $1 billion in enhancing its customer experience in 2026.

“We are well-positioned to be the airline those brand-loyal customers choose to fly them across the U.S. and around the world,” CEO Scott Kirby said in a statement.

United management will discuss third-quarter financial results and its fourth-quarter and full-year outlook at a conference call at 10:30 a.m. Thursday.

The airline was boosted by Delta Air Lines’ third-quarter results last week as its rival showed strength in premium, international, and corporate travel—three areas to which United is heavily exposed.

After a challenging year for the sector, it was starting to look like clear skies ahead for the remainder of 2025. That was until President Donald Trump threatened additional tariffs on China in a social media post last week.

The sector has been down this route before, when Trump’s sweeping global tariffs in April caused a brutal selloff from which it took months to fully recover.

But it did ultimately recover and fears that tariffs would cause a sharp travel slowdown were overplayed. “Airlines such as Delta and United that target high-end consumers, who drive consumption and have experienced a disproportionate amount of wealth creation, are not only producing solid profits, but generating meaningful free cash flow,” Deutsche Bank analyst Mike Linenberg said before the report.

Another potential distraction for investors is the continuing government shutdown. Flight delays and cancellations have been rising—with close to 16,000 delays over Sunday and Monday, according to FlightAware data, up from a daily average of around 4,500 in the first 11 days of the impasse.

If the shutdown does start to affect the stock, it could be a chance to buy, TD Cowen analyst Tom Fitzgerald said. “In the event of stress to the system that results in a drag on airline profits in the fourth quarter, we would view any weakness as a buying opportunity for top picks United and Delta,” he wrote in a note ahead of United’s earnings.

Write to Callum Keown at callum.keown@dowjones.com