United forecasts revenue growth of more than 20%, earnings below estimates as fuel costs weigh
Key Facts
United Airlines forecast operating revenue growth of more than 20% year on year in the fourth quarter of 2026, but its earnings outlook fell short of analysts' expectations as fuel costs continued to weigh on profitability. The airline said in an investor filing that it expected another revenue record in the final quarter of the year, extending its business growth. It forecast adjusted diluted earnings per share of between $0.50 and $1.50, with even the top end below the average analyst estimate. That average stood at $1.76 per share, according to London Stock Exchange Group data cited by Reuters in its October 20 report. The outlook combines continued revenue strength with difficulty fully offsetting additional fuel costs, after the company previously expected to achieve a full offset by this quarter.
For the third quarter of 2026, United reported record operating revenue of $17.9 billion, according to its filing with the U.S. Securities and Exchange Commission. Revenue rose 17.4% from the same period a year earlier, while its outlook for the following quarter points to faster annual growth. The company carried a record 49.5 million passengers during the quarter, alongside its record revenue. Adjusted diluted earnings per share were $2.54 for the period, according to the company's reported results. The quarterly results came as revenue growth failed to offset the entire increase in the fuel bill, according to Reuters, despite the business strength reflected in passenger numbers and sales.
On demand, travel by employees of companies with United contracts was among the activities that recorded growth, according to details in the quarterly earnings release. The company said revenue from that business rose 26% year on year in the third quarter of 2026, outpacing overall operating revenue growth. It also cited strong close-in bookings across segments in its description of demand during the period. Premium cabins also recorded revenue growth, with United saying in its statement: "Premium revenue rose 17%." Growth in that category was close to the increase in overall revenue, while contracted corporate travel posted the faster growth rate of the two businesses highlighted by the company.
Fuel expenses, meanwhile, rose 62% in the third quarter from the same period a year earlier, according to the figure in United's filing. Those expenses increased faster than operating revenue, despite the company's record revenue and passenger numbers. Reuters reported that revenue growth offset only 72% of additional fuel costs during the quarter, leaving part of the increase uncovered. The adjusted pretax profit margin fell to 6.2%, according to the agency's coverage of the company's results, as the higher bill continued to weigh on profitability. The margin had stood at 8% in the third quarter of 2025, marking a weaker annual comparison on margins despite revenue reaching a record.
United's fourth-quarter outlook assumes an average fuel cost of about $4.80 per gallon, according to its investor update, the assumption used in its estimates for the coming period. The company said analysts' consensus estimates assumed a cost of $4.35 per gallon for the same quarter, about $0.45 below its own assumption. Behind that difference, United had told investors in its July update that it expected to offset 100% of the increase in fuel prices by the fourth quarter of 2026. But the chief financial officer said, according to Reuters, that the offset rate during that quarter would be close to the rate achieved in the third quarter. He described that as "below the full offset it had previously expected," a retreat from the operating target the company announced before its latest results.
For 2026, the company maintained an estimate for adjusted capital expenditure of about $7.5 billion in its investor update, as part of its financial plans for the year. Management's expectations for elevated fuel costs extend beyond the final quarter, according to comments by Chief Executive Scott Kirby. Kirby said, in remarks reported by Reuters on October 21, 2026, that the company expected "fuel prices to remain elevated throughout 2027." That assessment follows quarterly results showing a narrower margin and management's expectation that it will miss its target of fully offsetting additional fuel costs in the fourth quarter. United thus enters the remainder of 2026 expecting another revenue record, while management factors continued high fuel costs into its planning for 2027.