Saturday, April 19th-0.2°C
21104
20654

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

21118


Recent Trending




Today's Market
S&P TSX14500.39+53.87
S&P CDNX998.770.80
DJIA16408.54-16.31
Nasdaq4095.516+9.291
S&P 5001864.85+2.54
CDN Dollar0.90720.00
Gold1293.80-9.2999
Oil104.59+0.83
Lumber326.10-2.70
Natural Gas4.735+0.205

 
Okanagan Companies
Pacific Safety0.115+0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.29+0.07
Cantex0.055+0.01
Anavex Life Sciences0.3750.00
Metalex Ventures0.08+0.005
Russel Metals30.66+0.11
Copper Mountain Mining2.35-0.07
Colorado Resources0.255-0.01
ReliaBrand Inc0.12-0.01
Sunrise Resources Ltd0.025-0.005
Mission Ready Services0.25+0.02

 



20260

FEATURED Property
18696782011 Elkridge Drive
3 bedrooms 3 baths
$379,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Learning to flirt with the edge

With all of the adventure activities I have done and still do, I wonder sometimes if the edge still exists. The systematic approach to learning a new adventure or extreme activity combined with the r...


Time spent prospecting

How much time should you put into prospecting? The question is a bit of a puzzle. Ideally, there would be a reference book that lists, by industry, how much time you should invest in prospecting acti...


Valuation fears grip markets

The Big Picture Valuation fears grip markets Growing concerns about the level of stock market valuations sparked a risk-off trade in global markets this week. Investors are worried that many companies...

_



21641

21641


Member of BC Press Council


21202