United Airlines Tops Profit Estimates, Plans $2 Billion Buyback


United Continental Holdings Inc said on Tuesday it would buy back more of its shares and boost third-quarter profit margin by selling fewer seats than previously planned to stop ticket prices from dropping.

The No. 3 U.S. airline by passenger traffic said in a statement its board had approved a $2 billion share buyback program. The move follows a boardroom battle this spring in which an activist investor won a seat on United's board.

With airlines adding flights that exceed passenger demand, United said it would expand capacity less than it had expected this year, by up to 1.5 percent, instead of up to 2 percent over 2015.

That would help boost its pretax profit margin in the third quarter. United estimated a margin of 13.5 percent to 15.5 percent excluding special items, compared with 12.7 percent a year ago.

United said it earned $588 million in the second quarter. Excluding items such as airport assets that lost value, profit fell 32 percent to $863 million, or $2.61 per share.

Source: Reuters

No comments

Powered by Blogger.