United Airlines posts third quarter net income of US$1.7bn excluding special items

UAL reported third-quarter net income of US$1.7bn, excluding special items. Including special items, UAL reported third-quarter net income of US$4.8bn. These results include a nonrecurring US$3.2bn non-cash gain associated with the reversal of the company’s income tax valuation allowance. For the third quarter of 2015 United reported revenue of US$10.3bn, a decrease of 2.4% year-over-year. In the quarter, the company amended its co-branded credit card marketing services agreement, which led to approximately US$100m of incremental revenue. This was more than offset by the declines in passenger revenue. Third-quarter 2015 consolidated PRASM decreased 5.8% and consolidated yield decreased 5.6% compared to the third quarter of 2014. The declines in PRASM and yield were driven largely by a strong U.S. dollar, lower surcharges, travel reductions from corporate customers in the energy sector and softening in domestic yields. “Fourth-quarter pre-tax margin is expected to be between 9.5 and 11.5%, excluding special items,” Hart added. In the third quarter, UAL generated US$1.3bn in operating cash flow, US$627m in free cash flow, and ended the quarter with US$6.9bn in unrestricted liquidity, including US$1.35bn of undrawn commitments under its revolving credit facility.