United Airlines posts 4Q profit of $140 million


| Zoom

(AP) - 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 percent to $9.33 billion, also higher than analysts had expected.

Passengers paid 3 percent 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 percent in the quarter to nearly $21 per passenger.

Fuel expenses fell 4 percent 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 percent in the current quarter. Its main competitor, Delta Air Lines, on Tuesday predicted growth of up to 4 percent. 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 canceled by United. The storm hurt revenue by about $80 million as some business travelers ended up not making their trips, United said. The impact on profits was less than that because the canceled 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 percent to $38.28 billion.

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

.


(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

Top Stories

  • Get Out of Jail Free?
    Why Seattle firefighters won't face felony charges in alleged homeless beating

  • Goats!
    Seattle deploys one of its most popular work crews to clean up the city
ATTENTION COMMENTERS: We've changed our comments, but want to keep you in the conversation.
Please login below with your Facebook, Twitter, Google+ or Disqus account. Existing MyNorthwest account holders will need to create a new Disqus account or use one of the social logins provided below. Thank you.
comments powered by Disqus
Sign up for breaking news e-mail alerts from MyNorthwest.com
In the community
Do you know a student who stands out in the classroom, school and community?
Help make their dreams come true by nominating them for a $1,000 scholarship and a chance to earn a $10,000 Grand Prize. Brought to you by KIRO Radio and Comprehensive Wealth Management.

Do you know an exceptional citizen who has impacted and inspired others?
KIRO Radio and WSECU would like to recognize six oustanding citizens this year. Nominate them to be recognized and to receive a $2,000 charitable grant.