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Q4 snap: Capacity guide raises sector concerns
While UAL's Q417 EPS of $1.40 (-21% YoY) was slightly ahead of both AE/cons at $1.34/1.31, the result itself was overshadowed by a very concerning 3-year ASM guide of ~4-6%, which constitutes a doubling-down of UAL's "natural share" strategy that has thus far delivered questionable results (FY17 PRASM, margins, earnings all declined YoY). With no immediate way of assessing the unintended consequences of this strategy (ie. the competitive response from peers), we suspect this news will now act as an overhang on the sector for some time.
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Atlantic Equities
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
Lindsay Bettiol
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