United Airlines (UAL) reported better-than-expected first-quart results, beating estimates on both the top and bottom lines. The company posted revenue of $12.54 billion, exceeding the analyst estimate of $12.44 billion. On the bottom line, United reported an adjusted loss of $0.15 per share, outperforming the expected loss of $0.57 per share.

To provide insights on the airline's performance, Third Bridge Global Sector Lead for Industrials, Materials and Energy Peter McNally joins Market Domination.

McNally acknowledges that while United's earnings beat expectations, the expectations "were pretty low" in light of the "high-profile issues" the company faced during the quarter, including challenges with the Boeing (BA) 737 Max-9 fleet. However, he emphasizes that the key going forward will be United's outlook on capital expenditures and aircraft deliveries.

McNally emphasizes the ongoing airplane shortage, as "Boeing's issues pre-date the pandemic" and Airbus cannot meet the entire industry's demand. As a result, he notes that United will be "pushing out capex" to secure the necessary aircraft to meet steady consumer travel demand.

Looking ahead, McNally forecasts heightened scrutiny and oversight from the government and the Federal Aviation Administration, noting that "it's not making it any easier to be an airline these days."

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This post was written by Angel Smith

Video Transcript

- United Airlines results topping first quarter estimates, despite a $200 million impact from the temporary Boeing grounding. Airline also noting several adjustments to its long-term fleet strategy. Here for a closer look let's bring in Peter McNally, Third Bridge Global Sector Lead for Industrials, Materials, and Energy. Peter, it's good to see you. So listen, they report investors clearly like it. The stock is popping in the after hours. Give us your take on the results, Peter.

PETER MCNALLY: Well, I think it comes down to expectations, and they were pretty low. Let's face it. These are some high profile issues that they faced. During the quarter around the Boeing 737 MAX 9, maybe not quite as bad as those low expectations. But the key thing, or the key things going forward, will be the outlook. And clearly they're going to get fewer planes than forecast. So we've seen CapEx get cut.

Eventually, they're going to spend that money. So instead of nine billion it looks like 6 and 1/2 will be the number this year, and they'll get 40 fewer planes. But if they want to get to their 2026 targets, they're still going to have to take delivery on that. And that's dependent on Boeing, and we all know what is happening there these days.