Recession Fears Have Us In the Days of 'Bimodal Guidance'

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.1 The midpoints of both outlooks, presented as ranges, are above Visible Alpha's current 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 decision illustrates the uncertainty faced by companies seeking to navigate a fast-changing trade 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.2

There's some early data out there, though it's not particularly 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.3 Two, meanwhile, pulled back previous guidance. One had a straightforward reason: Walgreens (WBA) is being acquired.4

The other was another airline. Delta Air Lines (DAL) gave out an outlook for the current quarter, but chose not to give out full-year guidance, saying in a statement that "given the lack of economic clarity, it is premature at this time to provide an updated full-year outlook."5

Other companies that have lately withdrawn their own guidance include Frontier Group Holdings (ULCC), the parent company of the airline with the same name, and Logitech (LOGI), the electronics maker.67

'Uncharted, Unprecedented Uncertainty'

"We're in uncharted, unprecedented uncertainty,” Delta CEO Ed Bastian recently said. Major U.S. airlines have broadly offered caution about 2025 in past months.  

United, meanwhile, isn't alone in dropping the "R Word." Larry Fink, CEO of asset manager BlackRock (BLK), recently said he's spoken with a number of chief executives who think the U.S. is already in a recession. Some big banks have raised their estimated odds of one soon. 

And on some betting markets, the odds of one this year are seen as more likely than not. On PolyMarket, for example, the perceived chance of a recession in 2025 was recently 54%, lower than seen earlier this month.8

The Wall Street Journal’s survey of economists, released this weekend, pegged the odds of a recession in the next 12 months at 45%.9

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1. United Airlines. "Investor Update."
2. Bank of America. "Earnings Tracker."
3. FactSet. "Will S&P 500 Companies Withdraw EPS Guidance for 2025?"
4. Walgreens Boots Alliance. "Walgreens Boots Alliance Reports Fiscal 2025 Second Quarter Results."
5. Delta Air Lines. "Delta Air Lines Announces March Quarter 2025 Financial Results."
6. Logitech. "Logitech Reaffirms FY 2025 Financial Outlook."
7. Frontier Group Holdings. "Form 8-K."
8. PolyMarket. "US Recession in 2025?"
9. The Wall Street Journal. "Economic Outlook Dives Just Three Months Into Trump's Turn."