United Airlines (UAL) earnings Q4 2022

United Airlines‘ fourth-quarter profit and outlook for early 2023 topped Wall Street estimates thanks to strong demand and high fares.

Consumers’ appetite for air travel and willingness to pay higher fares has helped airlines return to profitability despite higher costs for fuel, labor and other expenses tied to ramping their networks back up. Meanwhile, aircraft delivery delays and training backlogs have constrained airlines’ growth, keeping fares high.

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United reported an $843 million profit for the last three months of 2022 on revenue of $12.4 billion. That revenue was almost 14% higher than the same period in 2019, before the pandemic, despite flying 9% less.

Here’s how the carrier performed in the fourth quarter compared with what Wall Street expected, based on average estimates compiled by Refinitiv:

Adjusted earnings per share: $2.46 versus an expected $2.10Total revenue: $12.4 billion versus expected $12.2 billion

For the first three months of 2023, United expects to generate revenue 50% higher than the same period of 2022. It expects first-quarter earnings per share to be between 50 cents and $1, above analyst consensus of 25 cents, according to Refinitiv.

United shares gained 5% in extended trading Tuesday.

The quarterly update is another sign of a strong year-end for airlines, despite severe winter storms and disruptions during the popular holiday travel period.

Last week, Delta Air Lines‘ profit and revenue surpassed Wall Street’s expectations though higher costs, partly due to an expected pilot labor deal, weighed on its first-quarter profit forecast. Also last week, American Airlines, which reports on Jan. 26, hiked its profit and sales forecast for the fourth quarter.

United executives will hold a call with analysts and media at 10:30 a.m. ET Wednesday.

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