United Airlines (UAL) stock falls in wake of Boeing 737 groundings

United Airlines Holdings Inc (NASDAQ:UAL) shares fell 2.0% in afternoon trading on Wednesday, to buck the gains in the airline sector, over the looming uncertainty, the impact of the groundings of Boeing Co.( BA)’s 737 MAX planes, and the coronavirus outbreak offset a fourth-quarter profit beat and upbeat guidance.

 

United Airlines Holdings (UAL) reported late on Tuesday the adjusted earnings per share that was above the FactSet consensus, while the revenue was in line with expectations.

 

Early Wednesday, during the post-earnings conference call with analysts, company disclosed the first-quarter adjusted EPS of 75 cents to $1.25, as compared with the FactSet consensus as of Dec. 31 of 75 cents. In the post-earnings call, President Scott Kirby said on that a couple of challenges regarding financial outlook had cropped up in last 48 hours.

 

Kirby said, “We also can’t sit here and tell you that we know exactly how long the MAX will be grounded or what the economic impact of the Asian coronavirus would be,” according to a FactSet transcript.

 

“At this point, we’re assessing the impact of the schedule, but we do not anticipate flying the MAX this summer.”

 

On Tuesday, Boeing (BA) had said that it didn’t expect the MAX to return until mid-2020. United Airlines’s stock has shed 6.3% over the past three months.

 

On Tuesday, Boeing said it does not expect regulatory approval for the plane to fly until the middle of this year. Company had hoped to have the plane back in the air by the end of 2019, but FAA Administrator Stephen Dickson announced on Dec. 11 that would not happen until sometime this year.

 

Early on Wednesday United Airlines (UAL) officials said they are not expecting to have the Max flying passengers again this summer.

 

Boeing (BA) has not even considered or planned for the possibility that the 737 Max will not be allowed to return to service. Boeing share price fell