United shares dip on acting CEO’s first day; S&P downgrades
NEW YORK (AP) — Shares of United Airlines’ parent lagged other airline stocks a day after the company tapped its top lawyer to become acting CEO.
United announced late Monday that general counsel Brett Hart would take over indefinitely for CEO Oscar Munoz, who went on medical leave. The company confirmed that Munoz suffered a heart attack last week.
Munoz served as CEO for a little over a month after replacing Jeff Smisek, who stepped down amid a federal investigation.
Hart joined United in 2010 from food company Sara Lee, where he also was general counsel. United nonexecutive Chairman Henry Meyer said Hart has been learning other parts of the airline business.
S&P Capital IQ downgraded United Continental on Tuesday to “buy” from “strong buy.” Analyst Jim Corridore said Hart has “limited experience in finance, operations or customer service, the areas that (United) is most in need of improving.”
Wolfe Research analyst Hunter Keay said Hart would continue Munoz’s agenda of improving customer service. He said the CEO turnover could delay new labor agreements, but suggested he wasn’t expecting quick results on that front anyway. Keay kept his “outperform” rating on United shares.
In Tuesday afternoon trading, the shares were down $1.02, or 1.8 percent, to $55.73, while shares of American, Delta, Southwest, JetBlue and Alaska airlines either were declining by smaller percentages or in the black.