United Airlines (NASDAQ:UAL) Misses Q2 Sales Targets

Airline company United Airlines Holdings (NASDAQ:UAL) fell short of the market’s revenue expectations in Q2 CY2025 as sales only rose 1.7% year on year to $15.24 billion. Its non-GAAP profit of $3.87 per share was 1.5% above analysts’ consensus estimates.

Is now the time to buy United Airlines? Find out by accessing our full research report, it’s free.

"Our second-quarter performance was more proof that the United Next strategy is working. I am extremely proud of the team for executing a strong operation and navigating through a volatile macroeconomic period, while still growing earnings and pre-tax margin for the first half of the year," said United CEO Scott Kirby.

Company Overview

Founded in 1926, United Airlines Holdings (NASDAQ:UAL) operates a global airline network, providing passenger and cargo air transportation services across domestic and international routes.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, United Airlines grew its sales at an incredible 41.2% compounded annual growth rate. Its growth beat the average consumer discretionary company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new property or trend. United Airlines’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 6.8% over the last two years was well below its five-year trend.

United Airlines also discloses its number of revenue passenger miles, which reached 70.09 billion in the latest quarter. Over the last two years, United Airlines’s revenue passenger miles averaged 7.2% year-on-year growth. Because this number aligns with its revenue growth during the same period, we can see the company’s monetization was fairly consistent.

This quarter, United Airlines’s revenue grew by 1.7% year on year to $15.24 billion, falling short of Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 5.6% over the next 12 months, similar to its two-year rate. This projection is underwhelming and suggests its products and services will see some demand headwinds.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories.

Operating Margin

United Airlines’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 8.6% over the last two years. This profitability was mediocre for a consumer discretionary business and caused by its suboptimal cost structure.

In Q2, United Airlines generated an operating margin profit margin of 8.7%, down 4.2 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

In the coming year, Wall Street expects United Airlines to maintain its trailing 12-month operating margin of 8.6%.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

United Airlines’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

In Q2, United Airlines reported EPS at $3.87, down from $4.14 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 1.5%. Over the next 12 months, Wall Street expects United Airlines’s full-year EPS of $11.37 to shrink by 4.4%.

Key Takeaways from United Airlines’s Q2 Results

We struggled to find many positives in these results. Its revenue slightly missed and its full-year EPS guidance fell slightly short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 3.2% to $85.63 immediately following the results.

Is United Airlines an attractive investment opportunity at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.