United Airlines reported second-quarter adjusted earnings per share above expectations but said surging jet fuel prices tied to U.S.-Iran tensions could add roughly $6 billion to its 2026 costs, prompting an updated outlook and possible capacity cuts.
United Airlines (UAL) reported second-quarter results that topped Wall Street estimates but flagged a significant headwind from sharply higher jet fuel costs tied to renewed U.S.-Iran tensions. The carrier raised its full-year adjusted EPS range while warning the volatile fuel market may shave into future profit expectations and capacity plans.
Key results
Key results for the quarter ended June 30 (per LSEG estimates):
- Adjusted earnings per share: $1.99 vs. $1.88 expected.
- Revenue: $17.67 billion vs. $17.61 billion expected.
Guidance update
United now expects third-quarter adjusted EPS of $2.50 to $3.50 (analysts expected $3.60) and reiterated a full-year adjusted EPS outlook of $9 to $11, aligning with the upper portion of its April range. The company said it updated guidance to reflect sharply higher jet fuel prices since the start of July.
Fuel cost pressure and outlook
United said jet fuel costs in the second quarter rose roughly 84% year-over-year to $2.3 billion. Using fuel prices as of Tuesday, the carrier estimated that higher jet fuel could add nearly $6 billion to its 2026 expenses versus the company’s assumptions at the start of the year. United said the recent July fuel price moves alone reduced third-quarter adjusted EPS by $1.12 per share under its current assumptions.
The airline noted it would cover up to 90% of the higher fuel expense this quarter and expects to cover all of the excess cost in the fourth quarter, based on current hedges and pricing mechanisms. In its regulatory filing, United added that the company could further reduce capacity plans this year if fuel costs remain elevated.
Context & Background
Revenue, capacity and demand
United expanded flying by 3.5% in the second quarter. Total revenue rose 16% year-over-year to $17.67 billion, with total unit revenue up 12.1% from a year earlier — the strongest unit-revenue growth since early 2023, per FactSet. The carrier reported higher revenue across premium, corporate and basic-economy fares and said unit revenue increased on both domestic and international routes.
Profitability and cash flow
Net income fell more than 17% to $805 million, or $2.46 per share. On an adjusted basis (excluding one-time items), United reported $649 million in net income, or $1.99 per share.
Market Reaction
United’s results came amid industrywide pressure from rising jet fuel, the largest operating cost after labor for carriers. Rival Delta Air Lines (DAL) likewise said it is passing more fuel-related costs to customers. Despite higher fares, United said customer demand has continued to hold.
What’s Next
United executives will host an earnings call on Thursday at 10:30 a.m. ET to discuss the quarter and updated outlook.
Why It Matters
Rising jet fuel driven by geopolitical volatility can materially alter airline profit expectations and capacity planning. United’s updated guidance and its estimate of nearly $6 billion in incremental fuel expense provide a concrete measure of the current cost shock for investors and sector analysts.
Key Quotes
- United: second-quarter fuel costs rose 84% year-over-year to $2.3 billion.
- United: higher fuel prices could add nearly $6 billion to expenses this year versus the company’s start-of-year assumptions.
- United: July’s fuel-price moves have reduced third-quarter adjusted EPS by $1.12 per share under current assumptions.
Bottom Line for Traders
United reported better-than-expected Q2 results and strong unit-revenue growth, but the company signaled material downside risk from volatile jet fuel costs. Investors should weigh the firm’s raised full-year EPS range against the nearly $6 billion fuel headwind and the potential for capacity adjustments if prices remain elevated.
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