October 16, 2018 / 8:44 PM / a year ago

United lifts 2018 target as network growth boosts third-quarter profit

CHICAGO (Reuters) - United Airlines UAL.N posted solid third-quarter profit on Tuesday and raised its 2018 outlook for the third time this year, helped by its strategy to add flights at three mid-continent U.S. hubs: Chicago, Denver and Houston.

FILE PHOTO: A United Airlines Boeing 787 taxis as a United Airlines Boeing 767 lands at San Francisco International Airport, San Francisco, California, February 7, 2015. REUTERS/Louis Nastro/File Photo

United, the third-largest U.S. airline, announced the plan to expand its domestic network last January. Since then it has added more than 40 domestic routes, and on Monday it announced additional U.S. flights starting next year.

The growth, coupled with tighter cost control and higher ticket prices and fees, have helped the Chicago-based carrier counter a surge in crude oil prices.

United earned $3.13 per share, excluding the impact of tropical storms, which the carrier said diluted earnings per share by about 7 cents in the quarter. Analysts were forecasting $3.07 per share in the quarter, according to Refinitiv data.

Shares of United, which have risen 25 percent this year compared with an 11 percent fall in the S&P 500 Airlines stock index .SPLRCAIR, gained 4.2 percent after the bell.

Total operating revenue rose 11.2 percent to $11 billion year-on-year, underpinned by booming global travel demand.

The company forecast adjusted profit for the full year at between $8.00 and $8.75 per share, up from its previous range of $7.25 to $8.75 per share.

Under its network expansion strategy, United grew capacity by 5.1 percent in the third quarter and expects between 5 and 6 percent growth in the fourth quarter. Total 2018 capacity is seen rising about 4.9 percent from a year ago.

United paid $2.6 billion for aircraft fuel in the third quarter, up 42 percent from a year earlier, but said it expects to recapture approximately 90 percent of the estimated year-over year growth in its 2018 fuel bill.

Last week Delta Air Lines Inc (DAL.N) also posted solid quarterly profit thanks to strong demand and cost controls. Rivals American Airlines Group Inc (AAL.O) and Southwest Airlines Co (LUV.N) are to report their quarterly results next week.

Reporting by Tracy Rucinski; Editing by Leslie Adler

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