April 17th, 2024- One of our portfolio holdings, purchased recently, United Airlines (UAL) (1 unit @$41.78) announced its quarterly result after markets closed on Tuesday. United Airlines reported first-quarter revenue of $12.5 billion, compared to the consensus estimate of $12.4 billion. And an adjusted quarterly loss of 15 cents per share, outperforming analyst estimates of 57 cents per share. They also increased their capacity by %9 despite their projected fleet orders partly not coming due to Boeing’s halt in production of Boeing’s MAX 737. They announced that they expect to add 61 planes to their fleet revised from their previous 101 estimate, plus they are planning to lease 35 Airbus A321 in 2026 and 2027. The company CEO Ed Bastian said they had a good quarter driven by the increased travel demand, especially corporate travel. He said he anticipates United Airlines and the industry as a whole to carry a record amount of travelers this summer. The airline expects to post second-quarter earnings between $3.75 and $4.25 exceeding analyst’s estimates of $3.76. Another good news for the stock is the compensation deal with Boeing for Max groundings,delays. The regulators had grounded 737 MAX for about three weeks which resulted in a $200 million loss in the first quarter. However the company said that the terms of the deal is confidential but it will provide ’credit memos’ for future purchases. Following the announcements, the share price of United Airlines surged by %18 on Wednesday to close at $48.75.
Another portfolio holding, Eli Lilly (LLY) (0.2 units @$582.99) reported their weight-loss medication, Zepbound, performed well in treating sleep apnea, a common breathing disorder, during late-stage trials. There are an estimated 80 million patients who experience sleep apnea in the U.S. The situation creates another possible increase in demand for Lilly’s drug which is already experiencing excess demand. After the trial results, the share price of Eli Lilly increased by %3 but then it closed the day flat.
Author: Kaan Pinar