Earnings

United's Third-Quarter Profit Rose, But Adjusted Operating Income Fell To $1.231 Billion

Aircraft sale-leaseback gains lifted reported earnings while fuel costs cut into core results and free cash flow turned negative.

United Airlines' third-quarter net income rose to $1.03 billion from $949 million a year earlier, but its adjusted operating income fell to $1.231 billion from $1.322 billion. The 10-Q shows a large credit from selling and leasing back aircraft helped the reported number.

The finding: reported profit up, core earnings down

Operating special items were a $215 million credit in the quarter and a $749 million credit for the first nine months, according to the 10-Q. Aircraft sale-leaseback gains were $294 million in the quarter and $1.1 billion for nine months, against $336 million in the first nine months of 2025.

The company's earnings release shows standard operating income rose to $1.446 billion from $1.395 billion. Adjusted operating income, which strips out special items, fell 6.9%. Adjusted diluted earnings per share were $2.54 versus $2.78, while the standard figure was $3.14 versus $2.90.

Revenue was not the problem. Total operating revenue was $17.875 billion, up 17.4%. Aircraft fuel expense rose 61.6% to $4.843 billion, with the average price at $3.90 a gallon against $2.43 a year earlier.

The catch: cash went the other way

Third-quarter free cash flow was negative $1.843 billion versus negative $153 million a year earlier, the release said. Capital spending was $2.139 billion against $1.464 billion.

Nine-month operating cash flow fell to $6.874 billion from $7.145 billion. The 10-Q attributes that mainly to the one-time flight attendant ratification payment, which totaled $740 million and was paid on September 15.

Aircraft rent for nine months was $311 million versus $172 million, which the filing ties to new leased aircraft.

Liquidity and what to watch

On October 16, United amended its revolving credit facility, lifting commitments to $5.0 billion from $3.0 billion and extending maturity to October 16, 2031. No borrowings were outstanding at the filing date. The company had $14.7 billion in unrestricted cash and short-term investments at September 30.

The company bought no shares in the third quarter, and $755 million remained under its buyback authorization as of October 15. CNBC reported fourth-quarter fuel guidance of $4.80 a gallon.

Fuel at $3.90 a gallon this quarter is the baseline against which the reported $4.80 fourth-quarter guidance will be measured.