United Airlines Holdings was founded in the United States of America in 1968. Before the change of names in 2019, United Airlines Holdings was previously known as the United Continental Holdings, Inc. The company obtained the name United Continental Holdings, Inc. in 2010 after acquiring an acquisition of Continental airlines. After the merger and acquisition, the United Airline Corporation shareholders owned 55% of the merged entity and while the continental shareholders owned 45%. The company has several subsidiaries worldwide, thus making it the world’s largest airline. Major subsidiaries operated by United Airlines include CommutAir, Go Jet Airlines, Mesa Airlines, Republic Airways, SkyWest Airlines, and Air Wisconsin, among others. The company has its headquarters in Chicago and operations all over the world. The company provides air transportation services by transporting passengers and cargo through various mainland and regional fleets. These operations are carried out worldwide in Africa, Asia, Europe, the Pacific, and North America. Through its subsidiaries, the company offers other services that contribute to it being the leading company in the industry; some of the services include catering, training, ground handling, and maintenance services for other players in the industry.
Financials (Revenue and Operating Income)
Revenue is the amount of money that an organization like UAL receives from its clients and customers in exchange for services. According to finance. Yahoo.com, it is clear that there has been a consistent trend in the total revenue by the organization over the years. There was an increase from 41,303,000 in 2018 to 43,259,000 in the year 2019, an increase of 1,956,000, a 5% increase, thus showing that business was smooth and generating more revenue as the years went by. In 2020, the company experienced a decline in revenue to 15,355,000, a decline of 27,904,000, a huge decrease of 65% from 2019. This would have been triggered mostly by the emergence of the COVID19 Pandemic that came along with the worldwide travel bans and restrictions. In 2021, the revenue increased to 24,634,000, an increase of 9,279,000, resulting in a 61%increase in total revenue.
On the other hand, the operating income for United Airlines Holdings Inc. generated by deducting the operating expenses from the income without deducting the interest and tax payments was 4,301,000 in the year 2019, an increase from 3,292,000 in 2018 a 33.2% increase. In 2020 the organization experienced a decline in the operating income by a huge margin. United airlines Holdings Inc. lost -6,359,000, a decline of 248% sparked by the surge of the COVID19 virus. In the year 2021, the company also made an operating income loss of -1,022,000 a decline of 84% from 2020 (finance.yahoo.com, 2022)
Balance Sheet (Stockholders Equity)
United Airlines Holdings Inc. had an increase in the number of issued shares/ordinary shares from 2019 to 2021, where it recorded an increase of 8% in 2020 from 2019 and an increase of 15% in the year 2021. This is a trend showing that the organization has been doing great and has been a good sign to investors and analysts; hence can issue a significant amount of additional stock without seeing a significant drop in the price of the shares (Ganzong, 2020).
Analysts (Earning Estimates)
The earnings estimate is the analysis done by the firm’s analysts to estimate the firm’s expected future earnings per share. This kind of earning estimate is crucial since investors rely on the earnings per share estimates to decide whether to buy or sell d. Using the earnings estimates, analysts find the approximate value of the firm by evaluating the cashflows and researching the firm’s operations; hence can predict the firm’s growth potential and make trading decisions. According to the financial analysts in the United airplane Holding Inc., the earnings estimates are -13.94 for the current year 2022 and -1.52 for the year 2023. From the estimations, it is clear that there is an estimated growth in the earnings per share over the years. Organizations should manage their earnings to make sure that they beat the earnings estimates; thus, the firm is performing better than the average. If an organization manages to beat the earnings estimates, it is called the positive surprise, and if it is unable, it is regarded as a negative surprise (Cho et al., 2021).
Covid19 has affected the organization’s business in a very big way from travel restrictions and other related restrictions. The financial trends of United Airlines Holdings Inc. in the year 2020 were very low and declined from the previous year 2019. But with the Covid19 restrictions being lifted, there is a high probability for the organization to redeem itself and make profits.
Ganzorig, J. (2020). United Airlines Holdings (UAL) Stock Evaluation.
Cho, M., Xiong, Y., & Boatwright, B. (2021). Through the lens of ethnicity: Semantic network and thematic analyses of United Airlines’ dragging crisis. Public Relations Review, 47(1), 102006.