United Airlines reported second-quarter adjusted EPS above Street forecasts but said surging jet-fuel prices tied to U.S.–Iran tensions could add roughly $6 billion to 2026 costs, pressuring margins and capacity plans.
United Airlines (UAL) posted second-quarter results that topped Wall Street estimates, yet the carrier warned that sharply higher jet-fuel prices will materially increase its 2026 expense base and could prompt further capacity cuts.
Key results
Key results for the quarter ended June 30 (compared with LSEG estimates):
- Adjusted earnings per share: $1.99 vs. $1.88 expected
- Revenue: $17.67 billion vs. $17.61 billion expected
United updated its guidance, forecasting third-quarter adjusted EPS of $2.50 to $3.50 (analysts expected $3.60). For the full year, the airline now expects adjusted EPS of $9 to $11, narrowing and lifting the midpoint of its prior $7 to $11 range issued in April.
Market Reaction
Fuel Impact
United said jet-fuel prices have surged in July amid episodic U.S.–Iran conflict, citing Argus data via Airlines for America showing a 34% jump at major U.S. airports through the period referenced. Based on fuel levels as of Tuesday, the airline estimates the spike could add nearly $6 billion of incremental fuel expense this year versus its January outlook. United reported second-quarter fuel expense of $2.3 billion, an 84% increase from a year earlier.
The carrier said the fuel moves have already reduced third-quarter adjusted EPS by about $1.12 per share since the start of July. United plans to cover up to 90% of its higher fuel exposure this quarter and all of it in the fourth quarter, reflecting hedging and pricing strategies.
Capacity, Revenue and Demand
United expanded capacity 3.5% in Q2. Revenue rose 16% year-over-year to $17.67 billion, with total unit revenue up 12.1%—the largest year-over-year unit-revenue gain since early 2023, per FactSet. Revenue increases came from premium, corporate and basic-economy segments, and both domestic and international unit revenue improved.
Despite higher fares tied to cost-pass-throughs, United said demand has remained resilient. Rival Delta Air Lines (DAL) has also moved to pass more elevated fuel costs to customers.
Profitability and Cash Flow
Net income fell more than 17% to $805 million, or $2.46 a share. On an adjusted basis, excluding one-time items, United reported $649 million, or $1.99 per share.
What’s Next
United noted it is revising its forecast to reflect recent fuel volatility and said it could scale back capacity plans further if fuel stays elevated. Executives are scheduled to discuss results on an earnings call Thursday at 10:30 a.m. ET.
Why It Matters
Fuel is the largest variable cost for airlines after labor; a $6 billion swing materially affects margins, free cash flow and capacity planning across the industry. Investors and analysts will be watching United’s hedging effectiveness, fare response, and whether higher fares sustain demand into peak travel months.
Key Quotes
- United (company statement): higher fuel prices “could add nearly $6 billion to its expenses this year compared with what it expected at the start of 2026.”
- Company disclosure: second-quarter fuel costs rose 84% year-over-year to $2.3 billion.
Bottom Line for Traders
United beat near-term earnings expectations but issued a stark fuel-cost warning that compresses margins and clouds third-quarter EPS visibility. Traders should note the carrier’s updated guidance range, the company’s hedging coverage comments, and that rivals are likewise passing costs to passengers—factors likely to affect near-term airline sector sentiment.
$UAL Live Price, Interactive Charts and Performance Graphs
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