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United Airlines Raises Full-Year Earnings Outlook, Flags $6 Billion in Additional Fuel Costs Amid Rising Oil Prices

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United Airlines Raises Full-Year Earnings Outlook, Flags $6 Billion in Additional Fuel Costs Amid Rising Oil Prices

United Airlines (UAL) raised the low end of its full-year earnings outlook and reported upbeat second-quarter results, but the air carrier warned that rising oil prices are expected to add nearly $6 billion to its fuel costs this year, sending its shares lower early Thursday.

The company anticipates about $6 billion in added fuel expense for 2026 based on oil prices as of Tuesday, compared with expectations at the start of the year, it said late Wednesday. United Airlines forecasts an all-in average fuel price of about $3.69 per gallon in the ongoing three-month period.

The stock was down 2.3% in the most recent premarket activity.

Crude prices are rising following renewed tensions between the US and Iran, just weeks after the two countries signed a memorandum of understanding to end their war that began at the end of February.

In the second quarter, fuel expense was up $2.3 billion, or 84% year over year. United Airlines said it recovered approximately half of this increase. The company expects to recover about 80% to 90% of the increase in the current quarter and all of it in the subsequent period.

United Airlines now estimates adjusted earnings to be in a range of $9 to $11 per share for 2026, reflecting a higher bottom end than the previous guidance of $7. The company said it expects to be above the high end of the guidance if fuel prices return to their levels seen in early July. The current consensus on FactSet is for non-GAAP EPS of $10.47.

The company's adjusted EPS fell to $1.99 in the June quarter from $3.87 the year before, but topped the Street's view for $1.91. Operating revenue climbed 16% to $17.67 billion, surpassing the average analyst estimate of $17.62 billion.

Domestic passenger revenue advanced 20% to $9.51 billion, while international passenger revenue improved 11% to $6.59 billion, amid gains across the majority of regions. Cargo revenue grew 23% on a yearly basis, according to the company.

Total revenue per available seat mile rose 12% year over year while capacity increased 3.5%. Cost per available seat mile grew 15.2%, while unit costs excluding fuel moved 6.1% higher. Fuel price per gallon surged 79% on a yearly basis to $4.19.

Last week, Delta Air Lines (DAL) reported stronger-than-expected second-quarter results and reiterated its full-year earnings outlook.

For the ongoing quarter, United Airlines anticipates adjusted EPS to come in between $2.50 and $3.50. The Street is currently looking for non-GAAP EPS of $3.50. The company expects unit revenue growth in the third and fourth quarters to exceed the pace seen in the second quarter.

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