Through The Fly's Eyes: UAL Corporation

from Theflyonthewall.com









Strong Results for UAL; Still Looks Too Cheap

UAL Corporation (UAUA), the holding company for United Airlines, reported some of the best results in the company's history, as it earned its highest net income in 7 years.

• UAL generated operating cash flow of $1 billion for the quarter, versus a market cap $5.5 billion; year-to-date the company has generated $1.5 billion in free cash flow
• Revenue of $5.2 billion is the highest level in company history
• The highest profits in 7 years comes despite higher energy prices
• Operating profit margins doubled and most impressively was the free cash flow yield of 20%, pretty amazing considering this industry has a history of never earning its return on invested capital. It appears this might be changing, at least for the short term.

The large net operating loss allows the company to keep most of the money it makes and not pay it to the government. We started blogging about this stock when it was selling for $25 when it emerged from bankruptcy. I'd stay with UAL, there looks to be a lot more money to be made with this stock.