United beats profit estimates with boost from cheaper fuel

CHICAGO - United Continental Holdings Inc.'s first quarter profit exceeded analysts' estimates as tumbling oil prices handed the carrier a break on fuel costs.

Adjusted earnings fell to $1.23 a share, the airline said in a statement Wednesday. That topped the $1.18 average of 15 estimates compiled by Bloomberg. Sales declined 4.8 percent to $8.2 billion, matching analysts' expectations.

The Chicago-based carrier paid an average of $1.37 a gallon for jet kerosene in the first three months of the year, down more than a third from a year earlier. That helped blunt the effects of heavy domestic competition from discount carriers and economic weakness in big energy markets such as Houston. A stronger dollar has hurt overseas demand by making flights more expensive in local currency terms.

United's unit revenue - or passenger revenue per seat flown a mile - fell 7.4 percent in the quarter from a year earlier. The carrier expects it to decline 6.5 percent to 8.5 percent in the current second quarter.

That forecast is being dragged down by weak foreign currencies, aggressive pricing from domestic competitors and industry seating capacity that's outstripping demand, company executives said on a conference call with reporters Wednesday.

The company still sees strong demand for travel to Europe in the important summer season, Chief Revenue Officer Jim Compton said.