After the close today, United Airlines (UAL) is scheduled to report 2Q20 earnings. A conference call is set for tomorrow morning at 10:30 ET.

For the quarter, analysts are expecting UAL to report a loss of ($9.25)/share on revenue of $1.4 bln.

For context, in the year ago quarter, the airliner generated EPS of $4.21 on revenue of $11.4 bln

• Momentum slowly grew in June, leading UAL - and other airline operators - to ramp up flight schedules. On July 1, UAL announced that its tripling the size of its August schedule compared to its June 2020 schedule.

Since a very weak quarter is completely expected, the focus will fall mainly on UAL's liquidity situation and capital preservation strategy, and commentary r

TECHS:

For UAL and the airline industry in general, conditions will likely be very challenging for the rest of the year. In order for business to return to some sense of normalcy, a vaccine will likely need to be widely available.

United Airlines misses by $0.06, beats on revs

• Reports Q2 (Jun) loss of $(9.31) per share, excluding non-recurring items, $0.06 worse than the S&P Capital IQ Consensus of ($9.25); revenues fell 87.1% year/year to $1.48 bln vs the $1.40 bln S&P Capital IQ Consensus.

  • Cash burn during the second quarter averaged $40 mln a day, including $3 mln of principal payments and severance expenses.

  • Co currently is forecasting average daily cash burn to be approximately $25 mln during Q3, including $6 mln of principal repayments and severance expenses.

• Co believes it did the best job of matching actual capacity to demand among its largest network peers. Co also expects to finish the quarter with the lowest average daily cash burn among large network carriers.

• Co expects United produced fewer losses and lower cash burn in Q2 than any of its large network competitors.

CONFERENCE CALL NOTES:

• Company said it's generating "least bad"  financial results of any of network competitors in the current environment.

• Demand faded as COVID-19 spiked in the Sunbelt.

  • CEO Scott Kirby said the company may look back on Q2 as an extraordinary three month period.

• President Brett Hart said that the company is planning to be a smaller team, and airline by October 1.

• International demand is expected to be slower to recover than domestic; said borders are up, but international revenue remains low.

• Expects recovery in demand will be jagged; demand as measured by revenue to recovery over time, to be down 50% and plateau at that level until a virus is distributed.

• Temporarily reduced average seats for departure in May and June by 23%.

• Said United cargo team did well in the quarter and is on track them another great quarter.

• Q3 domestic capacity is expected to be down at least 55%.

• Domestic load factors in the coming weeks are expected to average just below half full or reduction from the 57% the company saw in June.

• Expects passenger revenue in Q3 will fall approx. 83% versus Q2.

• Continues to target over $18 billion in available liquidity by the end of Q3.

• Said Q2 avg. daily cash burn reduced to $40 million, including approx. $3 million in principal payments and severance expense.

  • Expects $25 million cash burn in Q3, including $6 million in debt payments and severance expense; assumes passenger revenues down 83% for the quarter.

• Has come to an agreement with Boeing (BA) that it will not be taking delivery on any new aircraft in 2022.

• Said recent uptick in COVID cases in late June and early July temporary stalled demand and permits.

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