United Airlines (UAL) Stock: Premium Growth Drives Earnings Beat Despite Revenue Miss

TLDR

• United Airlines reported Q3 adjusted EPS of $2.78, beating the $2.66 estimate, though revenue of $15.2 billion slightly missed expectations of $15.28 billion.
• The company issued strong Q4 guidance with expected EPS of $3.00-$3.50, well above the $2.82 analyst estimate, projecting record quarterly revenue.
• Premium cabin revenue grew 6% year-over-year while basic economy rose 4%, with loyalty revenue up 9% as investments in customer experience pay off.
• Stock fell 2% in premarket trading despite the earnings beat, with retail sentiment remaining extremely bullish on the results.
• Newark Airport operational issues from earlier in 2025 have reportedly improved, matching on-time performance with other NYC area airports.

United Airlines posted third quarter results that beat earnings expectations while missing slightly on revenue. The Chicago-based carrier reported adjusted earnings per share of $2.78 compared to the $2.66 Wall Street estimate.

Operating revenue came in at $15.2 billion. That fell just short of the $15.28 billion consensus estimate but still represented a 3% increase from the same period last year.

The stock dropped nearly 2% in premarket trading Thursday following the report. But retail investors on Stocktwits remained extremely bullish, with many calling the results a win.

United’s passenger revenue per available seat mile (PRASM) reached $73.77 billion. That beat expectations of $72.71 billion, showing the airline is getting more money from each seat flown.

Available seat miles totaled 87.42 billion, exceeding the 86.51 billion analysts projected. The metric measures total passenger-carrying capacity.

Premium Seats Lead the Way

Premium cabin revenue rose 6% compared to last year. Basic economy revenue grew 4% year-over-year, while loyalty program revenue jumped 9%.

The numbers mirror what rival Delta Air Lines reported last week. Delta saw premium revenue up 9% and corporate sales climbing 8%.

United has been investing heavily in customer experience upgrades. The airline is adding seatback screens, improving its mobile app, and installing Starlink Wi-Fi across its entire fleet by 2027.

CEO Scott Kirby said these investments are creating brand-loyal customers. He credited the strategy with helping United weather economic volatility through the first three quarters.

The focus on premium travelers appears to be working. Corporate and affluent customers are paying up for expensive seats at the front of the plane.

United is expanding capacity faster than many competitors. Last week the company announced new transatlantic flights to Italy, Spain, and Croatia.

Looking Ahead to Q4

United issued fourth quarter guidance that blew past expectations. The airline projects adjusted earnings per share between $3.00 and $3.50.

Wall Street was expecting just $2.82 per share. The company said it expects the fourth quarter to deliver the highest total operating revenue for a single quarter in its history.

Kirby pointed to improving economic conditions and growing demand. He said the company is seeing upside as the economy strengthens in the fourth quarter.

Cargo revenue grew 3% year-over-year in the third quarter. The company plans to provide full-year targets during its earnings call.

Earlier this year United faced operational problems at Newark Liberty Airport in New Jersey. Staffing shortages and air traffic control issues caused serious delays at one of the airline’s largest hubs.

Customers started avoiding Newark, creating capacity problems for United. By September the airline said Newark’s on-time performance matched LaGuardia and JFK airports in the New York area.

The broader airline industry faces concerns about a government shutdown affecting air traffic control staffing. Last week Nashville International Airport experienced delays due to controller shortages.

Burbank Airport operated without air traffic controllers for several hours. San Diego’s facility had to reroute flights during the outage.

Delta CEO Ed Bastian said last week that staffing isn’t currently hurting operational performance. But he warned a prolonged shutdown beyond this week could become a bigger concern.

One analyst from Candlestick Capital Management expects United’s stock to grow 2.5 to 3.5 times over the next 18 to 24 months. Jack Woodruff said structural changes in air travel are underappreciated by the market.

United’s stock is up 7% for the year. The company will hold its earnings call Thursday to discuss results in more detail.

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