United Continental Shares Slide 3.6% Premarket After Disappointing Unit Revenue Guidance

United Continental Holdings Inc. shares fell 3.6% premarket Wednesday, after the company disappointed with its guidance for unit revenue for the third quarter. The airline said it expects passenger revenue per available seat mile, or PRASM, to range from down 1% to up 1%. "We expect the shares to be weak today given the disappointing 3Q17 PRASM guidance," Cowen analyst Helane Becker wrote in a note. "Investors were estimating 3Q17 unit revenue would be flat to up 2%; our estimate was up 1.5%, so the guidance is disappointing." The airline is expecting capacity of about 4% in the third quarter, and expects its average fuel price to be $1.56 to $1.61 per gallon and pre-tax margins to range from 12.5% to 14.5%. United also raised its guidance for capital expenditures in 2017 to a range of $4.6 billion to $4.8 billion. United said late Tuesday it earned $818 million, or $2.66 a share, in the quarter, compared with $1.78 a share in the year-ago period. Adjusted for one-time items, United said it earned $846 million, or $2.75 a share, compared with $2.61 a share a year ago. Revenue rose 6.4% to $10 billion in the quarter. Analysts polled by FactSet had expected adjusted earnings of $2.66 a share on sales of $9.97 billion. The company, under a cloud earlier this year after a passenger was forcibly removed from one of its flights after he refused to give up his seat, said it had implemented several changes in the quarter to improve customer experience, including reducing overbooking. Shares have gained 8% in 2017 through Tuesday, while the S&P 500 has gained 10%.