United Airlines (UAL.US) releases "unconventional" dual performance guidance, managing to maintain profitability for the whole year even amid economic downturn.

In the face of uncertainty brought by Trump's tariffs, United Airlines (UAL.US) has taken an unusual step by providing two possible profit scenarios, stating that its outlook for 2025 can still be achieved but also warning that an economic recession could cut its profit forecast by nearly half. The airline said that if the current environment remains stable, adjusted earnings per share are expected to be $11.50 to $13.50. If the U.S. economy falls into a recession, annual profits will drop to $7 per share. The financial report shows that United Airlines' first-quarter revenue was $13.2 billion, an increase of 5.3% year-on-year; net profit was $387 million, compared to a net loss of $124 million in the same period last year; adjusted earnings per share were 91 cents, higher than Wall Street's expectations of 74 cents. United Airlines' stock price rose 5.2% after regular trading in New York ended, indicating that the company expects to remain profitable even during economic downturns, much to the relief of investors. As of the close of Monday, United Airlines' stock price has dropped by about 32% this year, more than three times the decline of the S&P 500 index during the same period. Its competitors American Airlines Group Inc. and Delta Air Lines, Inc. also saw increases on Tuesday. Bloomberg industry research analyst George Ferguson said, "Even in the worst scenario they forecast, they talk about $2.6 billion in profits." He further added that he has never seen a company provide so many outlook scenarios. "This is already a fairly negative expectation. In my view, this is not like a terrible environment." Due to disruptions caused by President Trump's tariff policies on consumers, businesses, and markets, the airline industry's lofty profit expectations for this year have been questioned. Delta Air Lines, Inc. withdrew its financial guidance for 2025 last week, citing global trade uncertainties and declining consumer and business confidence, leading to an "even" revenue growth expectation. Frontier Airlines' parent company also withdrew its full-year profit forecast due to a sluggish economic environment. Trump's tariff policy changes - first imposing tariffs on some countries and commodities, then quickly granting exemptions - have made it difficult for businesses to accurately predict demand and revenue. United Airlines stated in its investor update report on first-quarter financial performance that "this year's macroeconomic environment cannot be confidently forecasted in any way." Mohamed El-Erian, Dean of Queen's College at Cambridge University, said that United Airlines' decision to provide two profit forecasts highlights the importance of considering multiple scenarios when planning internally, rather than just sticking to conventions. Despite concerns about demand due to trade policy fluctuations, United Airlines stated that booking volumes remain stable. In the past two weeks, sales of premium cabins have increased by 17% year-on-year, and international flight sales have increased by 5%. United Airlines also stated that adjusted earnings per share for the second quarter will reach $3.25 to $4.25, while analysts' average expectation is $3.97. However, massive layoffs and border policy adjustments by the Trump administration have already led to a decrease in domestic flight bookings. United Airlines said it will reduce domestic flights by four percentage points starting in the third quarter, and will continue to reduce flights on low-demand dates in the fourth quarter. The airline had previously announced the early retirement of 21 aircraft. American Airlines Group Inc. is currently observing to see if postponing the imposition of certain tariffs can ease concerns and prevent a decline in profits from lucrative premium and long-haul international flights.