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Omar Venerio
Omar Venerio
Articles (1746) 

Thursday Morning Market Highlights

Markets in the red, United Airlines reports third quarter loss

US Markets

U.S. stocks were in the red on Thursday morning. The Dow fell more than 100 points, or 0.38%, to 28,405, the S&P 500 index slid 0.60% to 3,467 and the Nasdaq Composite Index was down 0.97%, to 11,654.

Gainers

Losers

Global Markets

The main European stock markets traded in the red. The UK's FTSE 100 fell 1.86%, France's CAC 40 slid 2.47%, Germany's Dax was down 2.79% and Spain's Ibex 35 slipped 1.65%.

In Asia, Japan's Nikkei 225 fell 0.51%, India's BSE Sensex retreated 2.61%, Hong Kong's Hang Seng lost 2.06% and China's Shanghai Composite was down 0.26%.

United Airlines releases earnings report

Shares of United Airlines Holdings, Inc. (NASDAQ:UAL) fell 4.5% on Thursday morning after the company announced financial results for its third quarter of fiscal 2020. It posted a loss of of $8.16 per share, falling short of analysts' estimates by 61 cents. Revenue of $2.49 billion fell 78.1% year-over-year and also came short of expectations by $50 million.

CEO Scott Kirby had the following to say:

"Having successfully executed our initial crisis strategy, we're ready to turn the page on seven months that have been dedicated to developing and implementing extraordinary and often painful measures, like furloughing 13,000 team members, to survive the worst financial crisis in aviation history… Even though the negative impact of COVID-19 will persist in the near term, we are now focused on positioning the airline for a strong recovery that will allow United to bring our furloughed employees back to work and emerge as the global leader in aviation."

Total operating revenues were down 78% year-over-year on a 70% decrease in capacity. Further, passenger revenue was down 84% year-over-year.

The average daily cash burn was $25 million (including debt principal payments and severance payments per day), down from $40 million in the second quarter. The airline reduced total operating costs by 59% when compared to the third quarter of 2019, or 48% when excluding special charges.

The stock's year-to-date decline is more than 60%.

At the end of June, Joel Greenblatt (Trades, Portfolio) and Warren Buffett (Trades, Portfolio) sold out the stock.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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