United Airlines (UAL) reported second-quarter results above Wall Street estimates but warned that surging jet fuel will add nearly $6 billion in costs this year, pressuring profits and prompting a capacity rethink.
United Airlines posted second-quarter results that topped analyst expectations, but the carrier said volatile, higher jet fuel prices will shave millions from profitability and could force further capacity cuts. The company updated its guidance for 2026 to reflect sharply rising fuel costs tied to recent U.S.-Iran tensions.
What United reported
- Adjusted earnings per share: $1.99 vs. LSEG/Wall Street expectation of $1.88.
- Revenue: $17.67 billion vs. $17.61 billion expected.
- Net income: $805 million, down more than 17% year over year (reported); adjusted net income $649 million, or $1.99 per share.
- Capacity: Expanded 3.5% in Q2.
- Unit revenue: Up 12.1% year over year — the strongest gain since early 2023, according to FactSet.
Why fuel matters now
United said jet fuel costs for the quarter rose 84% year over year to $2.3 billion. Based on fuel prices through Tuesday, the airline estimated higher fuel could add nearly $6 billion to its 2026 expense base versus its start-of-year forecast. The company said recent July fuel moves reduced third-quarter adjusted EPS by $1.12 per share. United expects to absorb up to 90% of its higher costs this quarter and all of them in the fourth quarter.
Guidance and capacity decisions
- Q3 adjusted EPS guidance: $2.50 to $3.50 (analysts expected $3.60).
- Full-year adjusted EPS outlook: $9 to $11, unchanged at the high end from a prior $7–$11 range updated in April.
- United acknowledged it may further trim capacity plans in response to elevated fuel costs.
Demand and revenue mix
Despite higher fares, United said customer bookings have held up. Revenue growth in the quarter was broad-based: premium cabins, corporate travel and basic-economy fares all rose. U.S. and international unit revenue increased, underpinning the 16% year-over-year revenue gain to $17.67 billion.
Industry context
Jet fuel — the second-largest operating cost after labor — has surged amid an on-and-off cycle of escalation and de-escalation in tensions between the U.S. and Iran. Argus data, cited by Airlines for America, showed jet fuel prices at major U.S. airports up 34% in July through Tuesday. Rival Delta Air Lines (DAL) also signaled it is passing more fuel costs to customers.
Leadership and next steps
United will hold an earnings call Thursday at 10:30 a.m. ET to discuss results and updated assumptions. The company said it is revising its forecast to reflect recent fuel volatility and will assess capacity adjustments as the cost outlook evolves.
Key quote
United highlighted that volatile fuel prices drove the decision to update guidance and that the carrier intends to cover most of the higher costs in the near term and fully by the fourth quarter (company statement, as reported).
Bottom Line for Traders
United delivered stronger-than-expected Q2 revenue and adjusted EPS but warned that near-term earnings remain exposed to jet fuel volatility. The carrier’s updated guidance and potential capacity reductions are market-relevant for UAL investors and for peers such as DAL, as airlines weigh fare pricing and capacity against an accelerating fuel bill.
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