United Airlines Earnings: Strong Revenue Offset by Ongoing Investments; Fair Value Estimate Lowered

United Airlines reported first-quarter 2024 revenue and profit that somewhat exceeded our forecast even though the company also attributed a $200 million deficit in the quarter to the temporary grounding of its Boeing 737 MAX 9 fleet. With a $124 million adjusted operating loss in the quarter, the implication that the no-moat airline would have booked about $80 million in profit on $11.3 billion in revenue were it not for the Boeing grounding did not leave us impressed. United has also had to reshuffle its airplane order book to reflect delayed deliveries by Boeing, and as a result of the spaced-out and generally higher capital spending forecast from the company, we have lowered our fair value estimate to $35 from $38 per share.