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Bloomberg
United Airlines Holdings Inc withdrew its 2020 profit forecast, citing the financial impact of the coronavirus outbreak in China.
The uncertainty surrounding the virus means United can’t guarantee its earlier goal of earning $11 to $13 a share this year, according to a regulatory filing. The earnings target is still within reach if the outbreak runs its course by mid-May and travel patterns return to normal in the five months after that, United said.
The airline’s caution underscores the worsening financial drag as the spread of the new coronavirus stymies global travel. Airlines around the world have halted flights to China, while in other industries companies from Apple Inc to Puma SE have warned that the virus threatens their results. Mastercard is the latest to join the chorus, lowering its forecast for revenue growth.
United fell 1% to $74.70 after the close of regular trading in New York. During the session, the S&P 500 index tumbled the most in two years on coronavirus fears.
The Chicago-based airline said it still expects to meet its first-quarter guidance of 75 cents to $1.25 per share, aided by a decline in fuel prices, cost savings and a revised co-branded credit card agreement with JP Morgan Chase & Co.
United had the most service to China among US airlines, with 12 daily flights. It has removed that flying from its schedule until April 24.
Flights to destinations in all of Asia were expected to account for 15% of United’s capacity this year.