UAL earnings up 76 percent
CHICAGO -- UAL Corp. said Tuesday its third-quarter profit surged nearly 76 percent, a better-than-expected performance due largely to pared-down costs and a boost in passenger revenue at United Airlines.
It was the company's most profitable quarter in seven years, besting a record set during the previous quarter.
The parent of the nation's No. 2 carrier said it earned $334 million, or $2.21 per share, for the July-through-September quarter. That's up from $190 million, or $1.30 per share, during the same period last year.
Excluding special items, many related to the company's emergence from federal bankruptcy protection last year, the company earned $295 million, or $1.96 per share, easily topping Wall Street forecasts.
Meanwhile, revenue for the Chicago-based company climbed 6.8 percent to $5.53 billion, up from $5.18 billion.
On average, analysts surveyed by Thomson Financial forecast earnings of $1.88 a share on revenue of $5.36 billion.
"We delivered excellent results this quarter driven by fundamental improvements across our core business," Chairman and Chief Executive Glenn Tilton told employees in a prepared statement. "Building on the momentum from our second quarter results, it's clear our focus on strengthening United is working."
United said its passenger revenue per available seat mile, a key revenue measure of the amount the airline makes for each seat flown, grew 8.9 percent. Total passenger revenue on mainline flights, or that from flights not counting its regional United Express operations, climbed 7.6 percent.
Since emerging from bankruptcy in February 2006, United has restructured to trim costs and reduce domestic flight capacity to make sure planes in the air are more full.
But analysts were concerned about how much exposure the carrier has to rising fuel prices and higher-than-expected maintenance costs.
"Fuel is a notable headwind," Goldman Sachs analyst Robert Barry told investors in a research note
UAL said its capacity likely would fall up to 1 percent during the fourth quarter while its cost per average seat mile excluding fuel would likely grow up to 6.5 percent. The carrier attributed much of that increase to higher maintenance costs and increased profit-sharing costs.