United Airways has its largest annual loss since 2005 and warns of inauspicious months because the pandemic drags on

A United Airlines-operated Boeing 787 Dreamliner takes off from Los Angeles International Airport.

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United Airlines posted a fourth-quarter loss on Wednesday, warning that sales would continue to suffer in early 2021 as the coronavirus pandemic drags on.

Here’s how United performed in the quarter compared to Wall Street’s expectations based on Refinitiv’s average estimates:

  • Adjusted earnings per share: a loss of $ 7 versus an expected loss of $ 6.60 per share.
  • Revenue: $ 3.41 billion versus expected $ 3.44 billion in revenue.

United’s fourth quarter revenue declined 69% year over year to $ 3.41 billion, below analysts’ estimates of $ 3.44 billion. The net loss of $ 1.9 billion for the quarter compared with a profit of $ 641 million a year ago.

The airline’s full year net loss of $ 7.07 billion was the largest since 2005.

The Chicago-based airline reported an adjusted loss of $ 7 per share, compared to estimates of a loss of $ 6.60 per share. The quarter consumed an average of $ 33 million per day, including debt and severance payments. Core daily cash burn that removes these items averaged $ 19 million in the fourth quarter, down $ 5 million from the third quarter.

The airline does not expect a quick turnaround earlier this year. Revenue in the first quarter is expected to be 65% to 70% below the 2019 level, the airline said. The estimated capacity in the first three months of 2021 will be at least 51% below the same period in 2019, reflecting a similar outlook from American Airlines.

The airline called 2021 a “year of transition” and expects to exceed its margins for 2019 to 2023.

United’s cargo business once again proved to be a bright spot in the pandemic. Revenue for the quarter increased 77% to $ 560 million. This unit contributed 16% to fourth quarter revenue, up from just 3% last year. Passenger airlines have tried to bolster this business over the past year as customers around the world faced a crisis in air cargo capacity.

United shares fell 1.7% in after-hours trading, following the report.

Airline executives said the widespread availability of coronavirus vaccines will lead to a recovery in air travel. However, the introduction of the vaccine was slow and chaotic, characterized by a lack of doses.

United executives will be holding a call Thursday at 10:30 a.m. ET to discuss their earnings and prospects.

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