United Airlines (NASDAQ:UAL) just released its highly anticipated second-quarter 2022 fiscal results. Clearly, investors are unimpressed with the data. UAL stock is down 9% today. Now, other airline stocks appear to be suffering from collateral damage.
Superficially, it might look like United knocked it out of the park this time. After all, United delivered the highest Q2 revenue in company history. Plus, despite high fuel prices, United managed to achieve its first profitable quarter since the start of the pandemic.
Here’s the breakdown. United Airlines reported $1.43 in second-quarter non-GAAP adjusted diluted income per share. In the same period just a year earlier, the company had sustained a loss of $3.91 per share. So, what could Wall Street possibly be complaining about?
The problem is that analysts expected earning of $1.85 per share for Q2. Despite the year-over-year (YOY) improvement, then, United Airlines still missed the mark.
Sometimes, traders can be unforgiving when companies miss analyst expectations. In this case, they’re being brutal with UAL stock, even punishing other airline stocks in the process.
What’s Happening with UAL Stock?
This is a classic case of one stock taking down its related peers. This morning, UAL stock is down 9% so far due to the bottom-line earnings miss. Now, American Airlines (NASDAQ:AAL) stock is also declining by 8%.
Delta Air Lines (NYSE:DAL) stock is down by nearly 4% as well, a more modest (yet still painful) blow. Overall, it’s not a great day to be invested in airline stocks.
Are sell-side traders overreacting? Maybe so. United Airlines’ $12.11 billion in Q2 revenue came in practically in-line with analyst expectations. So, it would be unfair to say that United’s results are disappointing across the board.
Still, it appears that investors are focusing on the company’s bottom-line miss. Although United Airlines seems to be demonstrating improvement, it’s evidently not good enough for some UAL stock traders.
On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.