United said its fourth-quarter unit revenue will decline between 1.25% and 1.75%, also reflecting improved guidance as a result of "stronger than expected close-in bookings and yields during the month of December." Yield is the fare paid for one mile. Previously, United had guided to a unit revenue decline of 3% to 4%.
The United report prompted UBS analyst Daryl Genovese to raise his fourth-quarter earnings estimate to $1.75 a share, ahead of consensus of $1.39. He has a $90 price target. United shares on Wednesday were trading at $76.19%, up 3.4%. The stock has gained about 5% year to date.
"We continue to view UAL as more similar to its legacy airline peers than it is different and see room for it to chip away at its margin deficit over time," Genovese wrote in a report. "We view this as an opportunity for better earnings growth over the next few years while stock trades at a discount to peers."
Southwest projected a first-quarter unit revenue decline of 3% to 4%, compared with earlier guidance of a 4% to 5% decline. It too cited improved close-in yields.
For its part, Delta said last week its December RASM was flat, "driven by strong demand trends and improving close-in domestic yields," and that fourth-quarter RASM will decline between 2.5% and 3%, an improvement from previous guidance towards a 3% decline.
Delta has said it anticipates flat unit revenue in the first quarter.