United’s Double Guidance Reveals What Everyone Is Thinking: “We Have No Clue What’s Happening"

United Airlines just did what every CFO wishes they could do on an earnings call: admit they have no f*ing idea what’s going to happen. How so? Well, in a move that screams commitment issues, United gave Wall Street two full-year profit forecasts for 2025—one for if the economy behaves, and one for when it inevitably doesn’t.

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In short, the airline maintained its original forecast of $11.50 to $13.50 in adjusted EPS, but also warned that if the U.S. economy tips into recession (which, technically isn’t exactly a long shot given the current trade war, layoffs, and consumer anxiety), earnings could fall to $7–$9 per share. The best part is they aren’t sugarcoating anything—management literally called the macro environment “impossible to predict.” Which, for a public company, is like throwing your hands up and saying “I’m just guessing here”. 

To which I say, fair enough. The truth is, United’s business is riding two completely different waves right now. On one end, international routes and premium-cabin bookings are crushing it. Rich people still want to fly to Europe in lie-flat seats and drink overpriced wine at 35,000 feet. Premium bookings are up 17% year-over-year and international traffic is up 5%. That’s where the money is. That’s what’s keeping the lights on.

(Source: CNBC) 

On the other end, plebs like us (read: domestic coach) is circling the drain. Unit revenue for U.S. flights dropped 3.9% in Q1. Meaning, the demand just isn’t there and the “I’ll take the cheapest seat and eat my knees for five hours” crowd is tapped out. Which brings us to United’s response: cut domestic capacity by 4% starting in Q3. Especially off-peak routes where the planes are flying half-empty. Genius. 

What’s more, is the despite the plummeting demand, United still managed to beat earnings expectations for Q1 ($0.91 adjusted EPS vs. $0.76 expected), and swung to a $387 million profit from a $124 million loss a year ago. So yeah, the numbers aren’t bad. Revenue came in at $13.21 billion, just below estimates. But still, the cracks are showing. 

(Source: Giphy) 

However, if you thought tariffs are going to blow up their cost structure, well, think again. United says they’re mostly insulated, since Boeing (gross), their main supplier, builds in the U.S., and most of their Airbus A321neos come out of Alabama. Of course, those planes are Frankenstein’d together from parts sourced globally, including engines made by a GE-Safran JV. So if the trade war escalates, I’d still expect some “unexpected supply chain challenges” in a future earnings call. 

But for now, investors are still in the same place United left them: stuck between a best-case scenario and a recession hedge, hoping the economy doesn’t completely implode. The airline is still profitable, still flying at full throttle internationally, and still squeezing every dollar it can out of the front of the plane. But you can fuggedabout the American dropping $300 to fly to Cleveland in a middle seat any time soon. Meaning, keep your eyes on United as well as the other airlines especially as demand slows, and as always, place your bets accordingly. Until next time, friends… 

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Stocks.News holds positions in United Airlines as mentioned in the article.