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$18 million loss
$2 million profit excluding special charges
$2 million profit excluding special charges
For the recent quarter, the Houston-based Continental /quotes/comstock/13*!cal/quotes/nls/cal (CAL 13.73, -2.19, -13.76%) said it lost $18 million, or 14 cents a share, after losing $230 million in the year-earlier quarter. Revenue fell 20% to $3.32 billion.
Excluding $20 million in charges, it earned 2 cents a share. Analysts polled by FactSet had expected a profit of 4 cents a share.
Shares of Continental plunged nearly 14% to close at $13.73. For the year to date the stock is down 24% versus the benchmark Standard & Poor's 500 Index /quotes/comstock/21z!i1:in\x (SPX 1,081, -9.66, -0.89%) , which is up 20% over the same period.
Mainline unit cost fell 21% as the average price for a gallon of jet fuel plunged 48.4% from a year ago. In total, Continental's third-quarter fuel bill fell 51% to $881 million.
However, that was more than offset by falling revenue. Mainline-passenger yields fell nearly 22% in the quarter as the airline slashed airfare to stimulate demand. Mainline traffic for the quarter fell 19% while seat capacity declined 4%.
"Third-quarter results continued to be adversely affected by significant declines in high-yield traffic as business travelers are flying less and purchasing lower-yield economy tickets due to the global recession," the company said in a statement.
There have been some early signs things are changing as premium bookings improved modestly for the quarter with an increase in seven- to 13-day booking, the company said.
"There are a growing number of our corporate accounts that tell us that they're beginning to ease their most Draconian travel restrictions, and some are even permitting travel for internal meetings again," said Chief Operating Officer Jeffery Smisek on a post-earnings call. "Although this is encouraging the yields are still soft."
Cargo revenue in the third quarter of 2009 decreased 28.7% from a year ago, due to reduced freight volume and lower pricing.
For October, Continental forecast a 13% to 15% decline in its passenger unit revenue, and a decline of 14% to 16% for its mainline operations. For September, consolidated unit revenue fell an estimated 18.5% to 19.5%, or 20% to 21% for its mainline operations.
For 2010, the airline expects to increase its year-over-year total seat capacity by 1.5% to 2.5%, driven by its international routes.
Mainline capacity is set to grow by 2% to 3%, the carrier said, with its domestic capacity flat. International mainline capacity is set to grow by 5% to 6%.
For the fourth quarter, Continental forecast fuller planes, with both mainline and consolidated load factors increasing by about 2.9 points versus last year.
Fourth-quarter mainline capacity is expected to come down by 0.7%, or 0.8% on a consolidated basis.
Continental said it expects to end 2009 with $2.4 billion in cash.
Continental is set to join the Star Alliance on Oct. 27, partnering with a group of global airlines that include US Airways /quotes/comstock/13*!lcc/quotes/nls/lcc (LCC 3.87, -0.48, -11.03%) , UAL Corp.'s /quotes/comstock/15*!uaua/quotes/nls/uaua (UAUA 6.92, -0.98, -12.41%) United Airlines, Lufthansa and ANA.
Continental ended the third quarter with $2.54 billion in unrestricted cash, cash equivalents and short-term investments.