United Airlines raised its full-year 2026 adjusted earnings forecast on Wednesday after second-quarter results came in above analyst expectations, even as surging fuel costs weighed on the bottom line.
For the quarter ended June 30, United posted adjusted earnings of $1.99 per share and $17.67 billion in revenue. That beat Wall Street's expectations of $1.88 per share and $17.61 billion, respectively, according to CNBC. Net income came in at $805 million, or $2.46 per diluted share, a decline of more than 17% compared with the year-ago quarter.
United now expects full-year adjusted earnings of $9 to $11 per share, up from its prior range of $7 to $11 per share. For the third quarter, the company forecast adjusted earnings of $2.50 to $3.50 per share. Analysts had projected $3.60 per share for that period.
Fuel costs were a major challenge. In the second quarter, aircraft fuel expenses jumped 84% from last year to $5.11 billion, with an average price of $4.19 per gallon. As of July 14, United said higher oil prices could add almost $6 billion to its full-year fuel costs compared to its earlier 2026 estimate. The company recovered about half of these extra costs in the second quarter and expects to recover 80% to 90% in the third quarter, and all of it in the fourth quarter.
Revenue growth was broad. Total operating revenue climbed 16% year over year. Premium revenue rose 16%, basic economy revenue increased 11%, loyalty revenue grew 11%, and cargo revenue advanced 23% compared with the second quarter of 2025. Contracted business revenue rose 27%.
In April, United lowered its full-year earnings guidance, reducing its January forecast of $12 to $14 per share to $7 to $11 per share. This change followed attacks by the U.S. and Israel on Iran in late February, which caused jet fuel prices to rise sharply. The airline also announced it would reduce its planned flying for the rest of 2026 by about five percentage points to manage higher costs.
Jet fuel at major U.S. airports had climbed 34% through Tuesday in July as tensions between the U.S. and Iran swung back and forth. United noted that fuel price volatility since July began has dented third-quarter adjusted earnings by $1.12 per share, adding that additional capacity reductions remain on the table should costs stay high.
"United is built to thrive in every environment, and when oil prices spiked in March, we quickly and decisively acted to adjust our schedules, while simultaneously doubling down on our customer investments," CEO Scott Kirby said in a statement.
United said it raised $3.7 billion in new liquidity during the quarter through private bank transactions and has prepaid approximately $1 billion of higher-cost debt since the start of the second quarter. The company said it is targeting an investment-grade credit rating in 2026.