Question

1. At the start of the chapter, we talked about how risky and volatile airlines’ operations

were. Let’s examine this further. Go to finance.yahoo.com. Enter UAL for

United Continental Holdings in the “Get Quotes” box. Go to “Company” along

the left-hand margin.

2. Click on “Profile” in the left-hand column and write a one-paragraph description

of the company. (https://finance.yahoo.com/quote/UAL/profile?p=UAL)

3. Scroll down and click on the “Income Statement.” Describe the pattern of change

for “Total Revenue” and “Income from Continuing Operations” in one paragraph. (https://finance.yahoo.com/quote/UAL/financials?p=UAL)

Revenue	12/31/2016	12/31/2015	12/31/2014
Total Revenue	36,556,000	37,864,000	38,901,000
Income from Continuing Operations
Total Other Income/Expenses Net			23,000	-327,000	-562,000
Earnings Before Interest and Taxes			4,361,000	4,839,000	1,811,000
Interest Expense			542,000	620,000	683,000
Income Before Tax			3,819,000	4,219,000	1,128,000
Income Tax Expense			1,556,000	-3,121,000	-4,000
Minority Interest			-	-	-
Net Income From Continuing Ops			2,263,000	7,340,000	1,132,000

4. Go to the “Balance Sheet.” In one sentence, describe the pattern of change in

stockholders’ equity and indicate whether this does or does not appear to be a

matter of concern. (https://finance.yahoo.com/quote/UAL/balance-sheet?p=UAL)

5. Click on “Analyst Estimates.” Do UAL’s earnings estimates appear to be more or

less promising for the future? https://finance.yahoo.com/quote/UAL/analysts?p=UAL

6. Finally, click on “Competitors.” How does UAL compare

Answer 1

As per rules, I will answer the first 4 sub-parts

1. Profile: UCL is a major airline headquartered in Chigaco in the United States. It has 89700 full time employees. The Company provides air transport services in  North America, the Asia-Pacific, Europe, the Middle East, Africa, and Latin America. In December 2016, it had a fleet of 1231 aircrafts. The Company transports people, cargo, sells fuel and also offers catering, maintenance and ground handling services for the customers. The Company is headed by Mr Oscar Munoz.

2. Revenue and Income from conitnuing operations: The total revenue of the business is on a decline. This is a cause for concern for the business. The EBIT of the business increased more than twice in 2015 as compared to 2014. However, the EBIT has reduced from 4839 million to 4361 million. The Interest expense has gone down which implies that the business has placed a lower reliance on debt. The amount of income from continuing operations has thus reduced to 2263 million in 2016 as compared to 7340 million in the previous year basically due to large income tax expenses.

3. The stockholders equity has reduced in 2016 and this is a matter of concern for the business since its equity base has reduced.

4. Analyst estimates: As the sales growth is expected to rise in 2018 to 5.3%, this seems to be a positive sign. The EPS is also expected to increase to 6.97 from 6.67in 2017. Thus the business shows a promising prospect.