United is adding seats faster than its rivals Delta and American, but it has filled most of them, and at higher prices. A key measure of pricing power, revenue for each seat flown one mile, climbed 5 percent in the three months that ended Dec. 31. Total revenue jumped 11 percent.
Chicago-based United expects more modest revenue growth in the first three months of this year, however. It predicted that the revenue-per-seat figure would be flat to up 3 percent. The partial government shutdown might play a role. Delta officials said earlier Tuesday that they expect to lose $25 million in revenue this month because of less travel by government workers and contractors. United didn't comment on the subject.
United predicted that 2019 earnings will be between $10 and $12 a share this year, in line with analysts' forecast of $10.98 per share, according to FactSet. In financial performance, United lagged Delta and American for several years. Under a strategy outlined more than a year ago, United has been trying to win back customers it lost by improving its on-time performance, reducing canceled flights, and offering new routes between its big U.S. hubs and smaller airports. United launched 93 new routes last year, more than its rivals.
CEO Oscar Munoz said in a statement that the financial results showed that the strategy is working. He said United had succeeded despite higher-than-expected fuel costs in 2018. United earned $462 million, down from $579 million a year earlier. United said profit excluding special items worked out to $2.41 per share, handily beating the mean forecast of $2.01 per share among 19 analysts surveyed by FactSet.
Revenue was $10.49 billion, also beating analysts' expectations. Profit was dragged down by sizeable increases in the airline's two biggest expenses. Its fuel bill jumped 27 percent from a year earlier — an extra $500 million in spending — while wages and benefits increased about 9 percent, or nearly $250 million.
Company executives are scheduled to discuss the results with analysts and reporters on Wednesday. Shares of United Continental Holdings Inc. closed up $1.29 to $81.20 before the earnings report. In after-hours trading following the release of the earnings report, they climbed $4.70, or 5.8 percent, to $85.90.