American Airlines and United Airlines reported better than expected September results on Tuesday, despite the impact of three hurricanes, sending their shares and stocks in other U.S. airlines up sharply.
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Of the largest U.S. carriers, United shares saw the biggest gains in afternoon trading, rising 5.35 percent to $68.15. Shares of rival American trailed only slightly behind, spiking 5.03 percent to $53.15.
Wall Street had expected the impact of powerful hurricanes Harvey, Irma and Maria to savage airlines' bottom lines well into the third quarter and beyond, putting a dent in the usually profitable third quarter.
Chicago-based United Airlines, the No. 3 U.S. carrier by passenger traffic, said its September consolidated traffic was down 1.6 percent, while its capacity increased 1.7 percent as compared to the year prior.
United said it now expected third-quarter passenger revenue per available seat mile, or unit revenue, to be down 3.5 percent and 4 percent. Previously, United had told investors that unit revenue would be down between 3 and 5 percent for the third quarter.
United was among the hardest hit carriers by the storms.
Hurricane Harvey swept through Texas, crippling much of the Houston area and forcing the temporary closure of three airports in one of United's biggest hubs. The storm is estimated to have cost the carrier $265 million, according to an early projection by analyst Helane Becker of Cowen & Co. United's statement on Tuesday did not address the total cost of Harvey in its statement.
American, the No. 1 carrier by passenger traffic, said the storms resulted in nearly 8,000 canceled flights and cost about $75 million in pre-tax earnings.
Still, the Fort Worth, Texas-based carrier raised its guidance on third-quarter total revenue per available seat mile, now projecting the metric to be up 0.5 percent to 1.5 percent on "stronger than anticipated yield performance."
Last week, Delta Air Lines, the No. 2 U.S. carrier, issued updated guidance on its third quarter, heartening investors and boosting shares across the sector.
On the Tuesday September reports, Delta shares rose 2.09 percent to $52.83. Shares of smaller rival JetBlue got a similar lift, springing 3.95 percent to $20.26.
Delta will kick off the third-quarter reporting season on Wednesday.
(Reporting by Alana Wise; Editing by Andrew Hay)