Tag: beats

United Beats Wall Street Expectations Despite 737 MAX Delays

January 21, 2020 / WIL BALDWIN

CHICAGO (Reuters) – United Airlines Holdings Inc <UAL> on Tuesday beat Wall Street estimates for quarterly profit and held to its 2020 profit target, with a turnaround strategy overseen by its outgoing CEO underpinning growth even as the Boeing 737 MAX remains grounded.

Chicago-based United is one of three U.S. airlines cancelling more than 1,000 monthly flights in a hit to profits as the 737 MAX remains grounded following two deadly crashes in Indonesia and Ethiopia. Boeing Co <BA> said on Tuesday it does not expect approval for the 737 MAX’s return to service until mid-year, later than previously forecast.

While United has warned of a hit from the MAX grounding, it did not disclose any estimated financial impact from the fallout and stood by its full-year adjusted EPS range of $11 to $13.

Total operating revenue rose 3.8% to $10.89 billion, boosted by strong travel demand and Chief Executive Oscar Munoz’s three-year strategy to build up the airline’s flight connections through its main U.S. hubs. United President Scott Kirby will succeed Munoz as CEO later this year.

Revenue per mile flown, a closely watched industry measurement, rose 0.8% in the fourth quarter and United forecast similar growth in the first quarter given solid bookings.

However, unit costs excluding fuel and profit-sharing expenses, a concern for investors in a year of contract negotiations with pilots, rose 2.7%.

United had already announced a non-cash impairment charge of $90 million in the fourth quarter related to its Hong Kong routes, following anti-government protests in the city.

Shares of United closed 4.4% lower at $85.79 before the earnings release, tracking sharp declines for U.S. airline and travel stocks on concerns over the Wuhan coronavirus in China, which J.P.Morgan analyst Jamie Baker said poses a near-term overhang for airlines.

United did not comment on the outbreak in its results but separately said there is no impact on its operations and it remains in close contact with U.S., Chinese and other Asian authorities on safety.

United management will host a conference call to discuss results on Wednesday at 10:30 a.m. EST (1630 GMT).

Adjusted net income rose to $676 million, or $2.67 per share, in the fourth quarter to Dec. 31, from $657 million a year earlier, topping a Wall Street consensus forecast for $2.65 per share.

Fellow U.S. MAX operators Southwest Airlines Co <LUV> and American Airlines Group Inc <AAL> are due to report quarterly results on Thursday.

The three airlines are scheduling without the MAX until early June though that timeline will likely need to be pushed back following Tuesday’s guidance from Boeing.

United, which had 14 737 MAX jets in its fleet at the time of the grounding, said it plans to take delivery of 28 MAX variants in 2020 depending on U.S. regulatory approval and Boeing’s subsequent pace of production and deliveries.

Among other aircraft orders, it expects to take delivery of two Boeing 777-300’s and 15 Boeing 787’s in 2020 but has decided to assign its purchase obligations for 20 Embraer 175’s to one of its regional partners once each jet is delivered.

(Reporting by Tracy Rucinski in Chicago; Additional reporting by Dominic Roshan K L in Bengaluru; Editing by Matthew Lewis)

An American Airlines Boeing 737 MAX 8 flight approaches to land at Reagan National Airport in Washington

Airbus to Become Preferred Supplier for Qantas Sydney to London flights

December 12, 2019 / WIL BALDWIN

FILE PHOTO: A passenger stands in front of a window where Qantas planes are parked at Melbourne Airport, Australia

SYDNEY (Reuters) – Qantas Airways Ltd <QABSY> said on Friday it has chosen Airbus SE <EADSY> as preferred supplier for jets capable of the world’s longest commercial flights from Sydney to London, beating rival Boeing Co <BA> after a hard-fought contest.

The choice of up to 12 A350-1000 planes fitted with an extra fuel tank for flights of up to 21 hours cements Airbus as the leader in ultra-long haul flying globally at a time when Boeing is battling delays on its rival 777X programme and a broader corporate crisis following two deadly 737 MAX crashes.

The Qantas flights would begin in the first half of 2023, but remain subject to reaching a pay deal with pilots, who would need to extend their duty times to around 23 hours to account for potential delays and switch between flying the A350 and the airline’s current A330 fleet. A final decision on an order is expected in March, the airline said.

Qantas Chief Executive Alan Joyce said the airline “had a lot of confidence” in the market for non-stop services from Sydney to London and to New York based on two years of flying non-stop from Perth to London, where it has achieved a 30% fare premium over one-stop rivals in premium classes.

“The A350 is a fantastic aircraft and the deal on the table with Airbus gives us the best possible combination of commercial terms, fuel efficiency, operating cost and customer experience,” he said.

Singapore Airlines Ltd <SINGY> operates the world’s current longest flight, nearly 19 hours from Singapore to New York, using an ultra-long range version of the smaller A350-900.

Airbus Chief Commercial Officer Christian Scherer thanked Qantas for its selection in a statement, while a Boeing spokesman said it was disappointed with the decision but looked forward to continuing its longstanding partnership with the airline.

Rico Merkert, a transport professor at the University of Sydney Business School, said the A350-1000 fit the Qantas brief well and was the safer choice, given Boeing has recently reported problems such as the grounding of the 737 MAX, structural cracks in 737 NGs and a fuselage split in a stress test of its 777-9.

“The A350 just seems to be a much safer bet,” he said. “And safety is at the core of everything that Qantas does including its brand.”

Airbus no longer provides list prices for aircraft, but based on its 2018 price list, the Qantas order could be worth up to $4.4 billion before heavy discounts that are standard for airline customers.

Citi on Friday estimated the planes would cost A$3 billion (1.6 billion pounds) to $3.5 billion, with the investment likely to be phased over three years.

The selection of the A350-1000 will add to growing doubts over Boeing’s plans to produce the 777-8 that it had proposed to Qantas for the mission.

Boeing had already said the entry into service for the plane, a smaller, longer-range version of the 777-9, would be delayed beyond 2022 but has declined to give a new date, saying it would be based on customer demand.

Customers Emirates and Qatar Airways have indicated they could switch orders for the 777-8 to the 777-9.

The 777-9 is due to enter service in 2021, following delays associated with its GE <GE.N> engines.

The Boeing spokesman said on Friday the manufacturer was focused on the development of the 777-9 and after that it would complete development of the 777-8, with the first delivery scheduled a few years after that.

(Reporting by Jamie Freed; Editing by Sam Holmes and Stephen Coates)

An Airbus A350-1000 performs at the 53rd International Paris Air Show at Le Bourget Airport near Paris

Microsoft Beats Amazon for Pentagon $10 Billion Cloud Computing Contract

October 26, 2019 / WIL BALDWIN

WASHINGTON, Oct 25 (Reuters) – Microsoft Corp. has won the Pentagon’s $10 billion cloud computing contract, the Defense Department said on Friday, beating out favorite Amazon.com Inc.

The contracting process had long been mired in conflict of interest allegations, even drawing the attention of President Donald Trump, who has publicly taken swipes at Amazon and its founder Jeff Bezos. Trump in August said his administration was reviewing Amazon’s bid after complaints from other companies.

The Joint Enterprise Defense Infrastructure Cloud (JEDI) contract is part of a broader digital modernization of the Pentagon meant to make it more technologically agile. Specifically, a goal of JEDI is to give the military better access to data and the cloud from battlefields and other remote locations.

Oracle Corp had expressed concerns about the award process for the contract, including the role of a former Amazon employee who worked on the project at the Defense Department but recused himself, then later left the Defense Department and returned to Amazon Web Services.

In a statement, an Amazon Web Services (AWS) spokesman said the company was “surprised about this conclusion.”

The company said that a “detailed assessment purely on the comparative offerings” would “clearly lead to a different conclusion,” according to the statement.

AWS is considering options for protesting the award, a person familiar with the matter told Reuters.

Although the Pentagon boasts the world’s most potent fighting force, its information technology remains woefully inadequate, according to many officials.

Officials have complained of having outdated computer systems and being unable to access files or share information as quickly as they might be able to in the private sector.

“If I am a warfighter, I want as much data as you could possibly give me,” Lieutenant General Jack Shanahan, the director of the Joint Artificial Intelligence Center, told reporters in August describing the importance of the contract.

Some companies were concerned that a single award would give the winner an unfair advantage in follow-on work. The Pentagon has said it planned to award future cloud deals to multiple contractors.

This week, U.S. Defense Secretary Mark Esper removed himself from reviewing the deal due to his adult son’s employment with one of the original contract applicants, IBM Corp. IBM had previously bid for the contract but had already been eliminated from the competition.

Microsoft said it was working on a comment. IBM and Oracle did not immediately return requests for comment.

In a book slated for publication Oct. 29, retired Navy commander Guy Snodgrass, who served as a speech writer to former Defense Secretary Jim Mattis, said Trump called Mattis and directed him to “screw Amazon” by preventing it from bidding on the JEDI contract, according to an excerpt of the book seen by Reuters ahead of its release.

“We’re not going to do that,” Mattis later told other Pentagon officials, according to the excerpt. “This will be done by the book, both legally and ethically.”

Snodgrass declined to comment pending the release of his book.

In a statement announcing Microsoft as the winner, the Pentagon underscored its view that the competition was conducted fairly and legally.

“All (offers) were treated fairly and evaluated consistently with the solicitation’s stated evaluation criteria. Prior to the award, the department conferred with the DOD Inspector General, which informed the decision to proceed,” it said.

Microsoft shares were up 3% to $144.98 in after-hours trading after the news. Amazon shares were down 0.92% to $1,745.12.

The Pentagon said it had awarded more than $11 billion across 10 separate cloud contracts over the past two years.

“As we continue to execute the DOD Cloud Strategy, additional contracts are planned for both cloud services and complementary migration and integration solutions necessary to achieve effective cloud adoption,” the Pentagon said.

(Additional reporting by Stephen Nellis and Jeffrey Dastin in San Francisco Reporting by Phil Stewart in Washington; Editing by Cynthia Osterman, Sonya Hepinstall and Lincoln Feast)

Union Pacific Quarterly Profit Beats Estimates

April 18, 2019 / WIL BALDWIN

FILE PHOTO: A Union Pacific rail car is parked at a Burlington National Santa Fe (BNSF) train yard in Seattle, Washington, U.S., February 10, 2017. REUTERS/Chris Helgren

(Reuters) – Union Pacific Corp on Thursday reported a better-than-expected quarterly profit, as the U.S. railroad raised prices, helping offset the impact of severe winter weather and record flooding that damaged rails in the Midwest.

Shares rose 2.7 percent to $173.80 in premarket trading.

Union Pacific’s operating ratio, a measure of operating expenses as a percentage of revenue and a key metric for Wall Street, increased 1 point to 63.6 percent from a year ago.

A lower ratio means more efficiency and higher profitability.

Total operating revenue fell to $5.4 billion from $5.5 billion.

The Omaha, Nebraska-based company’s net income rose to $1.4 billion, or $1.93 per share, in the first-quarter ended March 31 from $1.31 billion, or $1.68 per share, a year earlier.

Analysts, on average, expected a profit of $1.89 per share and revenue of $5.50 billion, according to IBES data from Refinitiv.

Union Pacific and Berkshire Hathaway-owned BNSF are the largest U.S. freight rail operators with an annual revenue of more than $20 billion each.

(Reporting by Rachit Vats in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Shailesh Kuber)

United Beats Wall Street Expectations Despite 737 MAX Delays

Airbus to Become Preferred Supplier for Qantas Sydney to London flights

Microsoft Beats Amazon for Pentagon $10 Billion Cloud Computing Contract

Union Pacific Quarterly Profit Beats Estimates

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