Shares of airline company United Airlines Holdings (NASDAQ:UAL) fell 7.1% in the afternoon session after the company cut its full-year profit forecast.
While the airline’s first-quarter revenue grew 10.6% to $14.61 billion and its adjusted earnings per share of $1.19 beat expectations, investors focused on the bleaker outlook. United Airlines lowered its full-year 2026 adjusted earnings guidance to a range of $7 to $11 per share, a significant reduction from the previous forecast of $12 to $14. The company pointed to rising fuel costs, exacerbated by geopolitical tensions, as the primary reason for the downward revision.
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United Airlines’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 6.8% on the news that oil prices dropped, as Iran announced the reopening of the Strait of Hormuz, improving the outlook for the airline industry.
The price for a barrel of benchmark U.S. crude tumbled by more than 10% after Iran said the Strait of Hormuz was fully open, allowing oil tankers to carry crude to customers worldwide. For airlines, fuel is a major expense, so a sharp drop in oil prices can lead to lower operating costs and potentially higher profits. This news also improved broader market sentiment. Wall Street rallied toward another record as easing geopolitical tensions and ongoing diplomacy between the U.S. and Iran created a more stable environment for investors, which was favorable for airline stocks.
United Airlines is down 19.7% since the beginning of the year, and at $90.78 per share, it is trading 22.8% below its 52-week high of $117.53 from January 2026. Despite the year-to-date decline, investors who bought $1,000 worth of United Airlines’s shares 5 years ago would now be looking at an investment worth $1,779.
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