Northwest and Continental post second consecutive quarterly profits
Thursday October 16, 5:03 pm ET
MINNEAPOLIS (AP) -- Northwest Airlines and Continental Airlines reported third quarter profits on Thursday, with summer travelers giving the carriers a much-needed boost as the industry mounts a slow recovery.
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It was the second consecutive profitable quarter for both carriers.
Northwest, the nation's fourth-largest airline, surprised Wall Street, which expected a loss, and shares of the Eagan, Minn.-based company shot up more than 7 percent on the Nasdaq Stock Market.
Houston-based Continental's profit was widely expected. The carrier's stock dropped more than 8 percent as executives pointed to persistent troubles faced by the industry.
Northwest Airlines Inc.
The carrier earned $42 million, or 49 cents a share, in the quarter ended Sept. 30, after a $5 million payout on preferred dividends. That compares with a loss of $46 million, or 55 cents a share, a year earlier. Revenue was essentially flat at $2.56 billion.
The results surprised Wall Street. Analysts surveyed by Thomson First Call had expected a loss of 49 cents a share.
Northwest's second-quarter profit of $227 million was due to government reimbursement of security fees and sale of ticket processor WorldSpan.
"These results do not signal an end to our challenges or diminish the need to address our cost structure in light of the changes in the revenue environment," said chief executive Richard Anderson.
"While it is encouraging to report a profit, the third quarter is traditionally strong for the industry due to greater demand in the summer months and in particular for Northwest because of its significant Pacific operation, which has an even greater summer demand peak," Anderson said.
Northwest will continue to try restructuring its labor costs, he said. The airline is seeking to cut companywide labor costs by $950 million per year.
Northwest currently is in contract negotiations with its pilots, ground employees and customer service representatives.
The company also has taken other steps to cut costs -- including closing the Michigan reservations center, rescheduling its Memphis hub and dropping domestic mail service -- to further reduce operating expenses and maximize revenues.
For the first nine months, Northwest lost $122 million, or $1.48 a share, down from losses of $310 million, or $3.63 a share, a year earlier. Revenues were down slightly to $7.10 billion, from $7.15 billion.
Northwest shares gained 95 cents, or 7.5 percent, to $13.70
Continental Airlines
Boosted by strong summer traffic and the sale of its ExpressJet stock, Continental swung to a profit of $133 million in the third quarter. But its chief executive said the carrier still faces tough times ahead.
Continental's earnings amounted to $1.83 a share for the July-September quarter in contrast to a loss of $37 million, or 58 cents a share, a year ago.
Revenue rose to $2.37 billion from $2.18 billion a year ago.
Excluding the gain from the ExpressJet Holdings Inc. stock sale, Continental earned 49 cents a share for the quarter. Analysts surveyed by Thomson First Call expected earnings of 43 cents earnings per share.
"Even after selling ExpressJet shares and receiving the government security fee reimbursement, we still have a year-to-date loss with a tough six month period ahead of us," chairman and chief executive Gordon Bethune said in a prepared statement. "We remain focused on being a long-term survivor by further reducing our costs to achieve a break-even position in 2004."
Continental's passenger revenue rose 7.4 percent from the same period last year. The company credited increased revenue from its regional Continental Expresss operations and improved mainline load factors.
ExpressJet provides Continental with all its regional service at the airline's hub airports in Houston; Newark, N.J.; and Cleveland.
For the nine months ended Sept. 30, Continental lost $9 million, or 14 cents per share, compared to a loss of $342 million, or $5.36 a share, for the year-ago period.
Nine-month revenue rose to $6.62 billion from $6.36 billion a year ago.
Shares of Continental fell $1.74, or 8.1 percent, to $19.65 on the New York Stock Exchange.
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Thursday October 16, 5:03 pm ET
MINNEAPOLIS (AP) -- Northwest Airlines and Continental Airlines reported third quarter profits on Thursday, with summer travelers giving the carriers a much-needed boost as the industry mounts a slow recovery.
ADVERTISEMENT
It was the second consecutive profitable quarter for both carriers.
Northwest, the nation's fourth-largest airline, surprised Wall Street, which expected a loss, and shares of the Eagan, Minn.-based company shot up more than 7 percent on the Nasdaq Stock Market.
Houston-based Continental's profit was widely expected. The carrier's stock dropped more than 8 percent as executives pointed to persistent troubles faced by the industry.
Northwest Airlines Inc.
The carrier earned $42 million, or 49 cents a share, in the quarter ended Sept. 30, after a $5 million payout on preferred dividends. That compares with a loss of $46 million, or 55 cents a share, a year earlier. Revenue was essentially flat at $2.56 billion.
The results surprised Wall Street. Analysts surveyed by Thomson First Call had expected a loss of 49 cents a share.
Northwest's second-quarter profit of $227 million was due to government reimbursement of security fees and sale of ticket processor WorldSpan.
"These results do not signal an end to our challenges or diminish the need to address our cost structure in light of the changes in the revenue environment," said chief executive Richard Anderson.
"While it is encouraging to report a profit, the third quarter is traditionally strong for the industry due to greater demand in the summer months and in particular for Northwest because of its significant Pacific operation, which has an even greater summer demand peak," Anderson said.
Northwest will continue to try restructuring its labor costs, he said. The airline is seeking to cut companywide labor costs by $950 million per year.
Northwest currently is in contract negotiations with its pilots, ground employees and customer service representatives.
The company also has taken other steps to cut costs -- including closing the Michigan reservations center, rescheduling its Memphis hub and dropping domestic mail service -- to further reduce operating expenses and maximize revenues.
For the first nine months, Northwest lost $122 million, or $1.48 a share, down from losses of $310 million, or $3.63 a share, a year earlier. Revenues were down slightly to $7.10 billion, from $7.15 billion.
Northwest shares gained 95 cents, or 7.5 percent, to $13.70
Continental Airlines
Boosted by strong summer traffic and the sale of its ExpressJet stock, Continental swung to a profit of $133 million in the third quarter. But its chief executive said the carrier still faces tough times ahead.
Continental's earnings amounted to $1.83 a share for the July-September quarter in contrast to a loss of $37 million, or 58 cents a share, a year ago.
Revenue rose to $2.37 billion from $2.18 billion a year ago.
Excluding the gain from the ExpressJet Holdings Inc. stock sale, Continental earned 49 cents a share for the quarter. Analysts surveyed by Thomson First Call expected earnings of 43 cents earnings per share.
"Even after selling ExpressJet shares and receiving the government security fee reimbursement, we still have a year-to-date loss with a tough six month period ahead of us," chairman and chief executive Gordon Bethune said in a prepared statement. "We remain focused on being a long-term survivor by further reducing our costs to achieve a break-even position in 2004."
Continental's passenger revenue rose 7.4 percent from the same period last year. The company credited increased revenue from its regional Continental Expresss operations and improved mainline load factors.
ExpressJet provides Continental with all its regional service at the airline's hub airports in Houston; Newark, N.J.; and Cleveland.
For the nine months ended Sept. 30, Continental lost $9 million, or 14 cents per share, compared to a loss of $342 million, or $5.36 a share, for the year-ago period.
Nine-month revenue rose to $6.62 billion from $6.36 billion a year ago.
Shares of Continental fell $1.74, or 8.1 percent, to $19.65 on the New York Stock Exchange.
www.continental.com
www.nwa.com
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