By Tracy Rucinski and Sanjana Shivdas
(Reuters) – United Airlines (O:) on Tuesday topped Wall Street estimates for quarterly profit, boosted by higher fares and lower fuel costs, and lifted its 2019 profit target despite the continued grounding of the Boeing 737 MAX.
Chicago-based United is one of three U.S. airlines that has had to cancel more than 2,000 monthly flights through the end of the year as Boeing Co’s (N:) 737 MAX remains grounded following two deadly crashes in Indonesia and Ethiopia.
The flight cancellations have weighed on airline profits and costs, but United said strong travel demand continued to offset MAX headwinds and disruption in Hong Kong and China. As a result, it raised its 2019 adjusted diluted earnings per share guidance to $11.25-$12.25 versus $10.5-$12.0 previously.
Adjusted net income rose to $1.05 billion, or $4.07 per share, in the third quarter, from $834 million or $3.05 per share a year earlier.
Analysts on average had forecast $3.95 per share, according to IBES data from Refinitiv.
Total operating revenue rose 3.4% to $11.38 billion, while closely watched revenue per available seat mile rose 1.7% in the quarter.
United has pulled its 14 MAX aircraft from its flight schedule until early January as the industry waits for Boeing to submit software updates to the U.S. Federal Aviation Administration for approval.
The airline, which is in talks with Boeing over 737 MAX compensation, did not provide any details on the estimated financial impact of the grounding.
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