United Airlines Holdings Inc. (UAL, Financial) has released its earnings report, solidifying the fourth straight quarter of losses for the airline.
The company reported a non-GAAP earnings loss of $7 per share that surpassed Refinitiv analysts' estimates of a loss of $6.60 per share. Revenue also came in at a 69% decrease from the year-ago quarter at $3.41 billion, lower than estimates of $3.44 billion.
Fourth-quarter net loss totalled $1.9 billion, bringing the company to an overall loss of $7.1 billion throughout 2020. These losses stemmed from a fourth-quarter daily cash burn of $23 million plus an additional $10 million of average debt principal payments and severance payments per day according to the company's report.
In the midst of the ongoing pandemic, United Airlines was the first airline to safely transport the Pfizer (PFE, Financial) and BioNTech (BNTX, Financial) Covid-19 vaccine into the U.S. This highlighted their improvements in cargo transportation during the quarter. United Airlines racked up an industry-leading 77% increase in revenue from cargo by deploying cargo-only missions according to their report.
"Aggressively managing the challenges of 2020 depended on our innovation and fast-paced decision making. But, the truth is that Covid-19 has changed United Airlines forever," CEO Scott Kirby said. "The passion, teamwork and perseverance that the United team showed in 2020 is exactly what will help us build a new United Airlines that's better, stronger and more profitable than ever. I could not be prouder of – and more grateful to – this team, which is going to lead us there."
Looking to the future, United Airlines expects 2021 to be a transition year where the company will focus on recovery. The period will serve to get on top of heavy maintenance and overhauls that will be crucial for the return of air travel demand. By 2023, the company is expecting to exceed reported earnings for 2019.
On Jan. 21, United Airlines stock was trading at $45.18 per share with a market cap of $13.22 billion. According to the GF Value Line, the company is currently significantly overvalued.
Top gurus investing in United Airlines include Ray Dalio (Trades, Portfolio), Lee Ainslie (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Primecap Management (Trades, Portfolio) and Pioneer Investments (Trades, Portfolio).
Dislcosure: Author owns no stocks mentioned.
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