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There's guidance, and there's If There's a Recession Guidance.
We got both from United Airlines (UAL) yesterday when the airline offered second-quarter adjusted earnings per share (EPS) guidance—a range of $3.25 to $4.25 per share—and full-year adjusted EPS guidance for both a “stable environment” and a “recessionary environment” while swinging to a first-quarter profit. The midpoints of the two outlooks, presented in ranges, are higher than Visible Alpha’s mean analyst estimates.
"The company's guidance is based on consensus market macroeconomic expectations," the company wrote. "However, a single consensus no longer exists, and therefore the company's expectation has become bimodal—either the U.S. economy will remain weaker but stable, or the U.S. may enter into a recession."
United’s move illustrates the uncertainty companies face as they try to navigate an ever-changing trading environment. That uncertainty has prompted investors and analysts to wonder if companies will not only be cautious in issuing outlooks as they report quarterly results in the coming days and weeks—but whether they’ll issue them at all.
Companies "tend to shut down guidance amid uncertainty," Bank of America analysts said last week.
Some early data is available, but it’s not conclusive. FactSet in a Monday note said that 16 of the 23 S&P 500 companies to report results through April 10 had discussed guidance, with 14 of those giving out some numbers for the 2025 or 2026 fiscal years. Two, on the other hand, has retracted previous guidance. One of the reasons was simple: Walgreens, Inc. (WBA) will be acquired.
Another airline was the other. Delta Air Lines, (DAL), gave an outlook for the current quarterly, but did not give full-year forecasts, stating that “given a lack of economic certainty, it is premature to provide a updated full-year perspective at this time.”
Frontier Group Holdings ULCC, the parent of the airline of the same name and Logitech LOGI, the electronics manufacturer are also companies that have recently withdrawn guidance.
'Uncharted, Unprecedented Uncertainty'
Delta CEO Ed Bastian stated recently that we are in a state of unprecedented, uncharted uncertainty. In recent months, major U.S. carriers have expressed caution about 2025.
United isn’t the only company to drop the “R Word.” Larry Fink, CEO BlackRock (BLK), said recently that he has spoken with several chief executives who believe the U.S. economy is already in recession. Some big banks increased their estimate of a recession soon.
On some betting markets the odds are that a recession will occur this year. On PolyMarket for example, the perceived probability of a 2025 recession was 54% recently, lower than earlier this month.
The Wall Street Journal surveyed economists this weekend and found that the odds of recession in the next year were 45%.
