How Will United Airlines Stock React To Its Upcoming Earnings?

United Airlines (NASDAQ:UAL) is scheduled to report earnings on Wednesday, April 16, 2025. Historical data shows that the stock has declined 60% of the time in the one day following earnings announcements, with a median drop of 4.4% and maximum one-day negative returns reaching 10%. While these statistics may not seem encouraging, there are several compelling reasons to remain optimistic about UAL at present. Among these are the ongoing recovery in corporate travel and the stock’s attractive valuation.

UAL has lately demonstrated strong performance, with sales growth driven by both increased flight capacity and a rise in passenger revenue per available seat mile. Additionally, the company’s profitability has been positively impacted by lower fuel prices. This positive momentum is expected to continue into the first quarter. Consensus estimates for Q1 2025 project earnings of $0.74 per share on sales of $13.2 billion. This represents a significant improvement compared to the first quarter of 2024, which saw a loss of $0.15 per share on sales of $12.5 billion.

The company has $21 Bil in current market capitalization. Revenue over the last twelve months was $57 Bil, and it was operationally profitable with $5.2 Bil in operating profits and net income of $3.1 Bil. While the post-earnings stock reaction will depend on how the results and outlook stack up against investor expectations, a detailed look at historical results can aid you if you are an event-driven trader. Here is how: either understand the historical odds and position yourself prior to the earnings announcement, or look at the correlation between immediate and medium-term returns post earnings and enter a trade one day after the announcement. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

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United Airlines’ Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 20 earnings data points recorded over the last five years, with 8 positive and 12 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 40% of the time.
• Notably, this percentage increases to 58% if we consider data for the last 3 years instead of 5.
• Median of the 8 positive returns = 6.4%, and median of the 12 negative returns = -4.4%

Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

UAL observed 1D, 5D, and 21D returns post earnings

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

UAL Correlation Between 1D, 5D and 21D Historical Returns

Is There Any Correlation With Peer Earnings?

Sometimes, peer performance can have influence on post-earnings stock reaction. In fact, the pricing-in might begin before the earnings are announced. Here is some historical data on the past post-earnings performance of United Airlines stock compared with the stock performance of peers that reported earnings just before United Airlines. For fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.

UAL Correlation With Peer Earnings

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