United Continental Holdings Inc. (UAL, Financial) achieved the “best-ever operational performance” in 2017, according to CEO Oscar Munoz.
The Chicago-based airline reported revenues of $9.4 billion for the final three months of 2017, outperforming analyst expectations by approximately $0.06 billion and increasing 4.3% from fourth-quarter 2016.
Company achieves solid operational performance during the year
Munoz mentioned the company achieved a record-setting year for operational reliability, a key pillar in the company’s “continued focus on further improving the customer experience.” The company highlighted several accomplishments, including the best on-time departure performance, the fewest cancellations and the best baggage handling performance among airlines. United also reported record-breaking performance during Thanksgiving and Christmas, peak times during the busy holiday season.
United said fourth-quarter passenger revenue per available seat miles (PRASM) increased 0.2% from the prior-year quarter. Cargo revenues of $304 million increased 34%, driven by higher international freight volumes and yields. The company reported full-year revenues of $37.70 billion, up 3.2% year over year.
Company offers good growth potential for 2018
Even though the company reported higher fuel and labor costs, Chief Financial Officer Andrew Levy mentioned the company “capped a successful year of disciplined cost control,” a key initiative United expects to continue this year. Levy mentioned in the earnings call that costs per available seat miles (CASM), which increased 4% year over year over the past three months, are expected to decline up to 1% in the upcoming year due largely to improved asset utilization and increased operating efficiency.
The company gave strong earnings guidance for the next several years: for 2018, United expects earnings between $6.50 and $8.50 per share. United also set an earnings target of $11 to $13 per share for 2020, which would represent between a 20% to 26% compound annual growth rate of earnings for the next three years.
United traded at $77.97 per share at market close, up 1.1% from its previous close of $76.85.
Disclosure: No position in United.
