United Parent Has Profitable Year Since Chapter 11

The parent of United Airlines said Tuesday it lost $61 million in the fourth quarter, but UAL Corp. still managed to post a $25 million profit in the 11 months since emerging from bankruptcy protection in February.

Its stock tumbled more than 4 percent in early trading on Nasdaq.

For the quarter that ended Dec. 31, UAL's loss amounted to 55 cents per share. For the February-December period, the company earned $25 million, or 14 cents per share. UAL has not earned a full-year profit since 2000 when it made $322 million.

"This has been a defining year for United," CEO Glenn Tilton said in a message to employees. "We exited bankruptcy, completing our restructuring and creating a platform that has supported the work we have been doing throughout this year. With the court-restructuring behind us, we have been able to focus on our performance and on our customers."

UAL was in bankruptcy protection during the 2005 fourth quarter, when it lost $16.9 billion - most of which was related to reorganization charges.

During the most recent quarter, revenue rose 5 percent to $4.6 billion in the latest quarter from $4.4 billion a year ago, but still fell short of Wall Street expectations.

On average, analysts surveyed by Thomson Financial forecast a quarterly loss of 35 cents per share and revenue of $4.7 billion. The estimates typically exclude one-time items.

Elk Grove Village, Ill.-based UAL, the nation's second largest airline by traffic, said a series of crippling winter storms cost $40 million in passenger revenue when the carrier had to cancel nearly 4,000 flights in December.

The airline said it didn't expect to increase its fleet in 2007 and forecast nearly flat capacity growth of 1 percent for the year.

Tuesday's announcement comes as the airline industry begins to show signs of renewed strength.

American Airlines parent, AMR Corp. said Wednesday it recorded its third straight quarter in the black and its first profitable year since 2000, earning $231 million in 2006. Meanwhile, Southwest Airlines Co. said its profit fell 19 percent to $57 million.

A day later, Continental Airlines Inc. said it too had its best year since 2000. Despite losing $26 million in the fourth-quarter, Continental earned $343 million for the year.

United lost billions of dollars from 2000 until earlier last year when it posted back-to-back gains during the second and third quarter. The carrier officially reported a $22.9 billion on-paper gain for the first quarter of 2006, but that reflected a formal settling of accounts from bankruptcy and was not a true profit. Excluding those reorganization items, it lost $306 million in that period.

Year-to-date earnings results for 2006 and 2005 are not directly comparable because of its emergence from bankruptcy on Feb. 1. For the eight months after that, UAL said it had a profit of $86 million; a year earlier, it lost $4.3 billion for the full nine-month period.

UAL shares fell $2.27, or 4.7 percent, to $46.480 in early trading on the Nasdaq stock market.

___

On the Net:

http://www.united.com


Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

News stories provided by third parties are not edited by "Site Publication" staff. For suggestions and comments, please click the Contact link at the bottom of this page.

Loading