Friday, October 9th11.5°C

Higher fares and traffic boost United Airlines 4Q profit, with help from cheaper fuel, too

The parent of United Airlines said Thursday that it earned $140 million in the fourth quarter, as more passengers flew and paid more for their tickets. The airline's fuel bill also shrank.

Its shares fell, though, after a disappointing prediction for revenue growth in the current quarter.

Net income at United Continental Holdings Inc. amounted to 37 cents per share. A year earlier it lost $620 million, or $1.87 per share.

Not counting special charges, United would have earned 78 cents per share — well above the 66 cents expected by analysts surveyed by FactSet.

Revenue rose more than 7 per cent to $9.33 billion, also higher than analysts had expected.

Passengers paid 3 per cent more per mile to fly compared to a year earlier. They paid more in add-on fees, too. United said ancillary revenue, which covers items such as baggage fees and seats with more legroom, rose 15 per cent in the quarter to nearly $21 per passenger.

Fuel expenses fell 4 per cent to $2.97 billion for the quarter.

United said in November that it intends to cut $2 billion in annual costs. The company is still working to integrate Continental after their 2010 merger. Although all the paint on the planes and the signs at the ticket counters read "United," the company still has to schedule flight crews and planes separately for the two airlines, reducing the savings from the merger.

"We have a lot of work ahead of us to deliver the financial results we're capable of but I am confident that we have the plans, the people and the focus to reach our long-term potential," chairman and CEO Jeff Smisek said on a conference call.

United said it expects a key measure of revenue to be flat to up 2 per cent in the current quarter. Its main competitor, Delta Air Lines, on Tuesday predicted growth of up to 4 per cent. Analysts expect Delta to report a profit in the first quarter of 27 cents per share, excluding items, but are forecasting a loss for United of 29 cents per share.

United's guidance means its first-quarter loss would, at best, meet expectations, and at worst be as large as last year's adjusted loss of 98 cents per share, JPMorgan analyst Jamie Baker wrote.

"2014 appears off to a somewhat inauspicious start for UAL," he wrote.

Snowstorms and a cold snap earlier this month caused thousands of cancellations across all the big airlines, including some 6,000 flights cancelled by United. The storm hurt revenue by about $80 million as some business travellers ended up not making their trips, United said. The impact on profits was less than that because the cancelled flights meant the airline didn't burn as much fuel.

For all of 2013, United earned $571 million, after losing $723 million in 2012. Revenue rose 3 per cent to $38.28 billion.

Shares of the Chicago-based company fell $1.18, or 2.4 per cent, to $48. They set a new 52-week high on Wednesday at $49.20


The Canadian Press

Read more Business News


Recent Trending

Today's Market
S&P TSX13978.66+110.31
S&P CDNX547.04+4.59
S&P 5002013.43+17.60
CDN Dollar0.7743+0.0059
Natural Gas2.492-0.006

Okanagan Companies
Pacific Safety0.23+0.01
QHR Technologies Inc1.23-0.02
Metalex Ventures0.05+0.00
Russel Metals21.55-1.57
Copper Mountain Mining0.61-0.02
Colorado Resources0.07-0.01
ReliaBrand Inc0.0166+0.0135
Sunrise Resources Ltd0.02+0.00
Mission Ready Services0.08-0.01
Decisive Dividend Corp3.11-0.10
Diamcor Mining0.94+0.06



2422691Rare home in Crystal Springs
more details
Click here to feature your property
Please wait... loading

Income for life?

Photo: Thinkstock.comIn almost every conversation I have with clients these days, the topic swings to interest rates. What direction they’re going, how long will they stay where they are and how...

Perfect (reno'd) home

Photo: Thinkstock.comHow many times have you found a home in the perfect location, but it needs too much work as per the home inspection? There is a great program available through most lenders that w...

5 Claim misconceptions

Photo: Thinkstock.comIf you have been hurt in an accident or as a result of medical negligence you will likely look to your friends and family for some advice on how to deal with the situation. These ...



Member of BC Press Council