Latest news with #WestTexas
Yahoo
15 hours ago
- Business
- Yahoo
United Airlines (UAL) Unfazed by Fuel Shock as Natural Hedges Point to Bullish Skies
Amid rising geopolitical tensions, a recent 7% surge in West Texas Intermediate (WTI) crude has renewed focus on airline fuel hedging strategies. United Airlines (UAL), which has maintained a minimal hedging approach in recent years, is especially exposed. With fuel costs directly affecting profit margins, UAL's stock remains highly sensitive to swings in oil prices. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Fortunately for United, encouraging trends in industry profitability and strong demand dynamics are a hedge in themselves, making me bullish on UAL in the second half of this year despite surging fuel prices. For those unfamiliar, airline fuel hedging is a risk management strategy using financial instruments—such as futures or swaps—to lock in fuel prices for future delivery. Essentially, it acts as an insurance policy, providing cost stability amid volatile energy markets. Each airline adopts its own approach, adjusting based on broader economic and geopolitical conditions. For example, Southwest Airlines (LUV) recently ended its once-active hedging program, reflecting a broader shift in the industry. United Airlines, meanwhile, has historically taken a minimal or opportunistic approach to hedging. This strategy is being tested as recent geopolitical tensions—particularly the missile exchanges between Iran and Israel—have pushed crude oil prices up by roughly 20% in the past month. While oil remains about 8% cheaper year-over-year and has stabilized from its pandemic-era highs, any sharp spike in prices immediately impacts United's bottom line. Fuel typically accounts for around 25% of an airline's total operating costs, meaning price increases can significantly compress margins for carriers without substantial hedging in place. It may come as a surprise to those who only interact with airlines as passengers, but the industry operates on razor-thin profit margins. In 2025, the average net profit margin across the sector was estimated at 3.7%, up slightly from 3.4% in 2024. United Airlines performed somewhat better than the industry average, posting a 5.5% profit margin in 2024—a relatively strong showing in such a margin-sensitive business. Improving profit margins have given airlines like United the confidence to lean more heavily on 'natural hedges' against fuel price volatility—strategies that focus on efficiency and sustainability rather than financial instruments. These include operational improvements such as operating newer, more fuel-efficient aircraft, eliminating physical magazines to reduce onboard weight, and utilizing single-engine taxiing to reduce fuel consumption on the ground. United has been especially proactive in this area, aggressively modernizing its fleet and taking a leadership role in the Sustainable Aviation Fuel (SAF) initiative to lower emissions and enhance long-term fuel efficiency. These efforts are beginning to pay off. In its Q1 2025 earnings report, United posted record revenue of $13.2 billion, a 5.4% year-over-year increase, and generated over $2 billion in free cash flow, a testament to the strength of its operational strategy. Reflecting stronger net profit margins across the airline industry in 2025, the International Air Transport Association (IATA) is also forecasting record-high industry revenues. This outlook is supported by projected declines in fuel prices and continued improvements in operational efficiency. In April, global revenue passenger kilometers (RPK)—a key measure of air travel demand—rose 8% year-over-year, signaling robust consumer interest. While fuel prices have spiked recently, IATA expects conditions to stabilize, projecting an average of $86 per barrel in 2025, down from $99 per barrel last year. With rising demand, falling fuel costs, and ongoing efficiency gains, United Airlines (UAL) may be well-positioned for a strong performance in the second half of the year. On Wall Street, UAL earns a Strong Buy consensus rating based on 14 Buy, one Hold, and zero Sell ratings in the past three months. Its average price target of $100.14 implies 33% upside potential over the next twelve months. Thomas Wadewitz from UBS is particularly bullish on UAL, having upgraded the stock to Buy and raised its price target from $67 to $105. The analyst cited tariff relief following the 90-day agreement with China. Moreover, 'a more stable economic backdrop and the recent rebound in the U.S. equity market give it increased confidence in the resilience of international and premium revenue, which had been its primary cyclical concern for both Delta and United.' While United remains exposed to short-term oil price spikes due to its limited fuel hedging, it has several mitigating strategies in place. If fuel prices ease as expected, United stands to benefit meaningfully. With air travel demand on the rise and strong operational performance—reflected in above-average profit margins and record revenue—United appears well-positioned for further improvement. That said, investors should closely watch oil price trends, particularly amid ongoing geopolitical uncertainty. Short-term volatility is likely, and those with lower risk tolerance may prefer airlines with more extensive hedging programs. Still, over the long run, strong fundamentals tend to win out. That's why, despite potential turbulence ahead, I remain bullish on UAL. Disclaimer & DisclosureReport an Issue
Bloomberg
16 hours ago
- Business
- Bloomberg
Oil Set for Third Weekly Advance as Trump Considers Iran Strike
Oil was on track for a third weekly gain, with President Donald Trump set to decide within two weeks whether to strike Iran. West Texas Intermediate for August held near $74 a barrel from Wednesday's close, while Brent settled below $79 on Thursday. White House spokeswoman Karoline Leavitt told reporters that the decision would take some time due to the ' substantial chance of negotiations ' with Iran, according to a dictated message from Trump. She declined to elaborate on the timeline.
Yahoo
18 hours ago
- Science
- Yahoo
Meet the crew of Blue Origin's NS-33 tourism launch to the edge of space
When you buy through links on our articles, Future and its syndication partners may earn a commission. The next Blue Origin tourism mission is upon us, as the space company maintains a steady monthly pace of private suborbital launches. NS-33 will be Blue Origin's 13th crewed launch to date, and the fifth New Shepard launch of 2025. The mission will carry six passengers to the edge of space, where they will experience several minutes of weightlessness before their capsule parachutes back down to terra firma. The crew includes Allie and Carl Kuehner, Leland Larson, Freddie Rescigno, Jr., Owolabi Salis, and James Sitkin. Here's a bit of background on each of them. Related stories: — New Shepard: Rocket for space tourism — Katy Perry and Gayle King launch to space with 4 others on historic all-female Blue Origin rocket flight — Blue Origin launches Michael Strahan and crew of 5 on record-setting suborbital spaceflight The NS-33 mission is scheduled to lift off from Blue Origin's Launch Site One in West Texas, on Saturday during a window that opens at 9:30 a.m. EDT (1330 GMT). A livestream of the launch will be available on beginning 30 minutes before liftoff, as well as on Blue Origin's website.
Bloomberg
2 days ago
- Politics
- Bloomberg
Supreme Court Backs Temporary Texas Nuclear Waste Storage Site
The US Supreme Court left intact a federal plan to store as much as 40,000 tons of highly radioactive waste at a temporary west Texas site. Voting 6-3, the justices threw out a challenge to a crucial license the Nuclear Regulatory Commission issued for the site. The court said Texas and a coalition of landowners and oil and gas operators lacked the legal right to challenge the license.
Yahoo
3 days ago
- Health
- Yahoo
Map shows more than 1,100 measles cases across U.S.
The United States has recorded the most measles cases in a single year since a 2019 wave, and the number continues to grow, Centers for Disease Control and Prevention data shows. The majority of the infections have been reported in an outbreak in West Texas that has led to the deaths of two children. The number of cases in Texas alone has grown to at least 750, while total cases nationwide have passed 1,197, with infections confirmed in at least 32 states. Measles is one of the most contagious infectious diseases, and in some cases can cause severe infections in the lungs and brain that can lead to cognitive issues, deafness or death. But doctors and health officials say the vaccine, which is normally given as part of the combination measles-mumps-rubella (MMR) vaccine, is highly safe and effective. While most people's symptoms improve, about 1 in 5 unvaccinated people who get measles will be hospitalized. About 1 out of every 1,000 children with measles will develop brain swelling that can lead to brain damage, and up to 3 of every 1,000 children who become infected will die, the CDC says. The largest outbreak so far this year has been in West Texas, but cases have been reported in other states around the country, as well. The CBS News data team is tracking confirmed measles cases nationwide as new data is released by state health departments and the CDC. (The map below is updated on Fridays when the CDC releases its latest weekly numbers.) The Texas outbreak is primarily affecting children and teenagers, nearly all of whom were unvaccinated or have an unknown vaccination status. State and local health officials confirmed the first patient who died was an unvaccinated school-aged child, and the second was an unvaccinated 8-year-old girl. Neither of the children had underlying health conditions, the Texas health department said. New Mexico also reported the death of an adult with measles. The last measles death in the U.S. before this year was in 2019, when a 37-year-old man died from measles complicated by meningitis in California, according to CDC data. The highest number of confirmed cases in the U.S. in recent years was 1,274 in 2019, driven by outbreaks in New York, California and Washington state, but most years the total has been much lower. Health experts point to lower vaccination rates as a reason for increases in preventable diseases like the measles. CDC data shows about 93% of kindergarteners in the U.S. were vaccinated against measles during the 2021-2022 school year and only 92.7% in the 2023-2024 school year. This is down from 95.2% during the 2019-2020 school year — a critical threshold to keep people safe. "When more than 95% of people in a community are vaccinated, most people are protected through community immunity (herd immunity)," the CDC states. Health and Human Services Secretary Robert F. Kennedy Jr., who has a history of making false and misleading claims about vaccines, voiced support for vaccination as the deadly outbreak spread in the Southwest. "We encourage people to get the measles vaccine," Kennedy told CBS News chief medical correspondent Dr. Jon LaPook in an interview April 8, marking the first time Kennedy has publicly urged people to get the measles vaccine since becoming HHS secretary. Asked by LaPook what the federal government's official position on the vaccine is, Kennedy reiterated, "The federal government's position, my position, is that people should get the measles vaccine," but added, "The government should not be mandating those." Teen questioned after family's quadruple murder Israel claims new intel about Iran's nuclear capability spurred attack Trump wraps Situation Room meeting on Israel-Iran conflict
