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Continental, Southwest part profit ways
By Padraic Cassidy, MarketWatch
Last Update: 10:27 AM ET Oct 19, 2006
NEW YORK (MarketWatch) -- Continental Airlines Inc. and Southwest Airlines Co. both reported Thursday higher third-quarter revenue from offering more seats for flyers, but fuel costs knocked Southwest's bottom line while Continental managed a better-than expected profit.
Network airline Continental said net income rose to $237 million, or $2.17 a share, from $61 million, or 80 cents a share, in the year-earlier third quarter. There were 36.5% more shares outstanding in the 2006 quarter, for a total of 111.8 million.
Continental said it gained $92 million from the sale of an investment in Copa Airlines and recorded charges of $1 million, making its adjusted income $146 million, or $1.36 a share, for the latest quarter.
Overall revenue amounted to $3.52 billion, up from the prior year's $3 billion.
Analysts polled by Thomson First Call had forecast, on average, earnings of $1.22 a share and revenue of $3.54 billion.
The Houston airline said passenger revenue in the quarter rose $471 million, a 17.1% increase to $3.2 billion, as it added more domestic and international flight capacity.
Continental also said its quarterly load factor, or the amount of seats filled with paying passengers, rose 1.1 percentage points to 82.2%.
To increase the fuel efficiency of its 737-500 fleet, the airline also announced Thursday it would install winglets on 37 of those aircraft.
Continental's shares led the airline sector higher in trading early Thursday, rising 3.5%. See full story.
At low-fare carrier Southwest, the profit story was different.
Quarterly profit after accounting for hedging charges was flat with the same period last year. Third-quarter net income fell to $48 million, or 6 cents a share, from $210 million, or 26 cents a share in the year-earlier period.
Southwest said total revenue in the three months ended Sept. 30 rose 17.7%, climbing to $2.34 billion from $1.99 billion.
The Dallas airline, ranked No. 1 in scheduled flights in 2006, said it would have earned 19 cents as share, excluding charges for hedging and derivatives, for the latest quarter.
The First Call-derived average forecasts for Southwest stood at a profit of 20 cents a share and revenue of $2.36 billion.
Southwest said its capacity, or available seat miles, rose 8.8% to 23.8 billion, resulting in a load factor of 74.7% for the September quarter.
Southwest had earlier forecast growth in revenue per available seat mile of less than 10%; that figure came in at 8.8%, with $40 million in lower revenue a result of security threats that roiled airline travel in mid-August.
The carrier's outlook for fuels costs of $1.50 to $1.60 a gallon in the fourth quarter was higher than $1.40 a gallon that Citigroup analysts had bene estimating.
Southwest's shares dropped 3% in recent dealings.
Padraic Cassidy is a reporter for MarketWatch in New York.
By Padraic Cassidy, MarketWatch
Last Update: 10:27 AM ET Oct 19, 2006
NEW YORK (MarketWatch) -- Continental Airlines Inc. and Southwest Airlines Co. both reported Thursday higher third-quarter revenue from offering more seats for flyers, but fuel costs knocked Southwest's bottom line while Continental managed a better-than expected profit.
Network airline Continental said net income rose to $237 million, or $2.17 a share, from $61 million, or 80 cents a share, in the year-earlier third quarter. There were 36.5% more shares outstanding in the 2006 quarter, for a total of 111.8 million.
Continental said it gained $92 million from the sale of an investment in Copa Airlines and recorded charges of $1 million, making its adjusted income $146 million, or $1.36 a share, for the latest quarter.
Overall revenue amounted to $3.52 billion, up from the prior year's $3 billion.
Analysts polled by Thomson First Call had forecast, on average, earnings of $1.22 a share and revenue of $3.54 billion.
The Houston airline said passenger revenue in the quarter rose $471 million, a 17.1% increase to $3.2 billion, as it added more domestic and international flight capacity.
Continental also said its quarterly load factor, or the amount of seats filled with paying passengers, rose 1.1 percentage points to 82.2%.
To increase the fuel efficiency of its 737-500 fleet, the airline also announced Thursday it would install winglets on 37 of those aircraft.
Continental's shares led the airline sector higher in trading early Thursday, rising 3.5%. See full story.
At low-fare carrier Southwest, the profit story was different.
Quarterly profit after accounting for hedging charges was flat with the same period last year. Third-quarter net income fell to $48 million, or 6 cents a share, from $210 million, or 26 cents a share in the year-earlier period.
Southwest said total revenue in the three months ended Sept. 30 rose 17.7%, climbing to $2.34 billion from $1.99 billion.
The Dallas airline, ranked No. 1 in scheduled flights in 2006, said it would have earned 19 cents as share, excluding charges for hedging and derivatives, for the latest quarter.
The First Call-derived average forecasts for Southwest stood at a profit of 20 cents a share and revenue of $2.36 billion.
Southwest said its capacity, or available seat miles, rose 8.8% to 23.8 billion, resulting in a load factor of 74.7% for the September quarter.
Southwest had earlier forecast growth in revenue per available seat mile of less than 10%; that figure came in at 8.8%, with $40 million in lower revenue a result of security threats that roiled airline travel in mid-August.
The carrier's outlook for fuels costs of $1.50 to $1.60 a gallon in the fourth quarter was higher than $1.40 a gallon that Citigroup analysts had bene estimating.
Southwest's shares dropped 3% in recent dealings.
Padraic Cassidy is a reporter for MarketWatch in New York.
