United Airlines Remains Pressured as Pandemic Hampers International Travel

Carrier reports 5th consecutive net loss as Covid-19 presents high risk to travelers

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James Li
Apr 21, 2021
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Shares of United Airlines Holdings Inc. (

UAL, Financial) tumbled over 8% on Tuesday following the release of its first-quarter earnings report. Despite this, the stock rebounded over 1.8% Wednesday morning amid a broad rebound in cyclical companies following two consecutive days of market losses.

For the quarter ending March 31, the Chicago-based airline reported a net loss of $1.357 billion, or $4.29 in loss per share, compared with net loss of $1.704 billion, or $6.86 in loss per share, in the prior-year quarter. The carrier reported its fifth consecutive quarter of net losses; further, adjusted net loss of $7.50 per share came in worse than the Refinitiv consensus estimate of adjusted net loss of $7.08 per share.

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Coronavirus pandemic continues hampering international travel

United CEO Scott Kirby said that long-haul and international demand remain more than 70% below 2019 levels: International passenger revenue for first-quarter 2021 were $604 million, a 76.4% nosedive from international passenger revenue for first-quarter 2020. International passenger load factor declined to 43.1% from the prior-year quarter value of 70.9%.

Kirby's comments follow the U.S. State Department's recommendation that travelers reconsider or not travel at all to over 80% of the world's countries, citing that the Covid-19 pandemic continues to present an "unprecedented" risk to travelers. On Saturday, worldwide coronavirus casualties topped 3 million according to Johns Hopkins University statistics, a grim milestone amid setbacks in vaccination progress around the globe.

Stock rebounds from early-week tumble amid broad rally in cyclical names

On Wednesday, shares of United traded around $51.22, up 1.83% from Tuesday's close of $50.30 but down approximately 6.8% from Monday's close of $54.99. Nonetheless, the stock remains significantly overvalued based on Wednesday's price-to-GF Value ratio of 2.45.

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The Dow Jones Industrial Average traded around 34,029.78, up 208.48 points from Tuesday's close of 33,821.30 yet down 170.89 points from last Friday's close of 34,200.67 following a two-day slide.

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GuruFocus ranks United's financial strength 3 out of 10 on several warning signs, which include a low Piotroski F-score of 2 and debt ratios underperforming more than half of global competitors.

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Gurus with holdings in United include

PRIMECAP Management (Trades, Portfolio), Jim Simon's Renaissance Technologies, Pioneer Investments (Trades, Portfolio), and Paul Tudor Jones (Trades, Portfolio)' Tudor Investment.

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Disclosure: No positions.

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I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!