Earnings Preview: United Continental Holdings

United Continental Holdings Inc., the world's largest airline company by traffic, reports third-quarter results before the stock market opens on Thursday.

WHAT TO WATCH FOR: This is an oddball quarter for United Continental. The holding company runs both United and Continental airlines, and is combining them into one airline. But they were still separate during the third quarter, and on Thursday it's expected to report separate financial results for the two.

Profits are expected. Airlines are in a sweet spot, able to charge higher fares because travelers are returning, but the number of seats has not risen to levels seen during boom years.

That means investors will have two big issues to watch for: Whether demand and fares are staying strong, and progress on integrating the two airlines.

WHY IT MATTERS: Stifel Nicolaus analyst Hunter Keay said United Continental will be a bellwether stock for airlines in a bull market, but also a leader in keeping capacity tight when travelers stay home. Either way, the shares should perform better than peers, he wrote in a note last week.

He's not expecting to hear much about United's 2011 strategy, since the deal only closed on Oct. 1. The company's CEO is Jeff Smisek, who previously ran Continental.

WHAT'S EXPECTED: Analysts polled by Thomson Reuters expect a combined profit of $2.16 per share on revenue of $5.41 billion.

LAST YEAR'S QUARTER: Business travelers stayed home, and so did airline profits. Continental lost $18 million, and United parent UAL corp. lost $57 million. Revenue fell about 20 percent at both airlines — to $4.43 billion for United, and $3.32 billion for Continental.