When United Airlines surprised analysts with its second-quarter revenue of $15.24 billion on Wednesday, it was a miss — but not by much. The airline’s stock fell almost 2% after the announcement. Yet United Airlines flew through, announcing an adjusted profit of $2.12 per share and missing revenue expectations. Their combined revenue of $22.73 billion exceeded earnings expectations.
Underwhelming revenue guidance sent United Airlines stock reeling. That was enough to send their shares down more than 1% in premarket trading after the company issued a disappointing forecast of $8.5 billion for 2025. United’s previous earnings guidance for the year was $7 to $9 per share. That’s down from their previous forecast of $11.50 to $13.50 per share.
Despite the revenue miss sending shockwaves through investors, the airline was still able to beat second-quarter earnings expectations. In all, analysts had been expecting even worse profits so the resulting earnings surprise became something of a silver lining during a quarter dominated by declining revenues.
More broadly, the market responded nervously to a series of economic indicators that came out the same day. U.S. retail sales jumped 0.6% over May, beating the Dow Jones expectation of 0.2%. Year-over-year, retail sales rose 3.5%, highlighting a generally strong consumer spending environment even with growing worries about inflation.
The Dow Jones Industrial Average ticked down, losing 7 points. Wall Street was trying to digest mixed economic data and earnings reports. This bearish mood was compounded by continued concerns about interest rate policy. As Tobin Marcus and Chutong Zhu of Wolfe Research recently warned, the overall economic environment is “extremely unfavorable to markets,” which should precipitate both an equity market selloff and a painful rise in long-term yields.
Beyond their own performance, United Airlines and others pointed to a troubling operating environment. PepsiCo’s stock rose by more than 1% on the back of the news, with the company announcing second-quarter results that exceeded analyst expectations. At the same time, Sarepta Therapeutics’ shares jumped by 32% after announcing plans to cut 36% of its employees.
Federal Reserve Chairman Jerome Powell found himself under political fire. Even though Trump openly ruled him out by making it clear that he had no intentions of firing him. Future FOMC meetings The Fed’s actions and policies, of course, are still under the microscope, as these and other unconventional policies keep shaping market conditions and investor confidence.