Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=220682
Story Retrieval Date: 12/5/2013 8:47:35 AM CST
United Continental Holdings Inc. has not had a profitable quarter for over a year.
United Continental loss narrows as merger-related costs ease
United Continental Holdings Inc.’s first quarter loss narrowed, as the financial toll from merger-related costs eased, the airline holding company announced Thursday.
The Chicago-based carrier reported a net loss of $417 million, or $1.26 per diluted share, compared with last year’s loss of $448 million, or $1.36 per share.
The first quarter result was slightly worse than the $1.09 a share deficit analysts surveyed by Yahoo Finance had been expecting.
Revenue rose 1.4 percent to $8.72 billion from $8.6 billion.
The company’s bottom line was helped because special charges, mainly related to United Airlines’s 2010 merger with Continental Airlines, decreased to $92 million from $164 million a year ago.
“This year, we're finally moving beyond our merger and our customers are seeing positive results from the hard work we've all put into building United,” said United CEO Jeffery Smisek.
Since United merged with Continental, the combined company has been focusing on integrating the two entities’ operations.
Although United’s first quarter results “illustrated strong operational improvement,” said Morningstar Basili Alukos, the latest performance didn’t provide enough evidence to change Morningstar’s estimate of the company’s fair value.
“While we reported a loss for the first quarter, our plan for 2013 remains the same, to generate a return on invested capital of at least 10%,” said John D. Rainey, chief financial officer. “We intend to recover the revenue we temporarily lost last year, strengthen our balance sheet and aggressively manage our costs.”
The company said its operating loss was $264 million for the latest quarter, down slightly from the year-ago period’s $271 million operating loss.
United’s costs for aircraft fuel decreased by 5.5 percent to $3.05 billion, reflecting the fact that United has cut its flights as it continues to iron out the route structure of the combined companies. As a result, UAL’s capacity, as measured by “available seat miles,” decreased by five percent.
In New York Stock Exchange trading Thursday, UAL shares closed down 50 cents, or 1.6 percent, at $30.89.