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Bond Market News

United Beats on Q4 Earnings; Warns of Higher Costs in Q1

January 20, 2022

American carrier United Airlines reported stronger than expected earnings for Q4 ended December with revenues coming in at $8.19bn, above estimates of $7.96bn but 25% below Q4 2019 levels. Net loss for the airline narrowed to $646mn vs. a loss of $1.9bn in Q4 2020 and a profit of $641mn in Q4 2019. Adjusted loss per share came in at $1.6, better than analyst estimates of $2.09 as per a FactSet survey. For the full year 2021, net loss came in at $1.96bn despite federal aid of $4bn to cover labor costs. In terms of guidance for Q1 2022, United warned of a negative impact from the ongoing spike in Covid-19 cases in the US. It expects revenues to be 20-25% lower vs. Q1 2019 levels and costs ex-fuel to rise ~15% on a per-seat basis. Capacity in Q1 2022 will be at 82-84% of 2019 levels, revised from its earlier guidance of 105% owing to the surge in Omicron cases.

United’s 5.875% 2027s traded 0.15 points lower to 109.47 yielding 4.02%.

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