Preview: United Continental expected to post profit

United Continental Holdings Inc. is expected to post a profit when it reports third-quarter results Thursday morning, with investors watching to see how well demand is holding up in a soft economy. They are also looking for an update on progress in integrating United and Continental into a single airline.

WHAT TO WATCH FOR: United is aiming to do something at which airlines have rarely succeeded: Making money while fuel prices are high and the economy is soft. Several airlines, including Delta and U.S. Airways, have said they believe they can keep their costs low enough to make this possible.

WHY IT MATTERS: United has reduced its fall capacity. The idea is to match supply with demand, so they don't have to resort to sales to fill the available seats. Barclays airline analyst Gary Chase wrote in a recent note that investors will be wondering how those changes are affecting performance, and whether there are other opportunities to cut capacity.

Investors are also looking for an update on the merger. The deal closed Oct. 1, 2010, and after more than a year the company still has a lot left to do to combine the two airlines, including reaching a single contract to cover all of its pilots. United pilots recently elected a chairman who is widely viewed as being more assertive than his predecessor.

Fuel hedging could be another wild card. Southwest Airlines Co. reported a quarterly loss last week because of accounting for fuel hedges. United Continental hedges against rising jet fuel prices, too. With oil prices falling during the quarter, the company's fuel hedges might have hurt its profits.

WHAT'S EXPECTED: Analysts surveyed by FactSet are expecting a profit of $2.08 per share on revenue of $10.11 billion.

The company has only existed in its current form since the merger on Oct. 1, 2010. So the company's fourth-quarter results in January will be the first results that will be comparable to a year-ago period.