UAL Expects to Post
Jul 24, 2006 | 3:02 pm
#1
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UAL Expects to Post
UAL Expects to Post
Profit in Second Quarter
Associated Press
July 24, 2006 11:15 a.m.
CHICAGO -- UAL Corp., the parent of United Airlines, on Monday said it will likely report a stronger-than-expected profit for the second quarter, driven by double-digit operating revenue growth and cost controls.
UAL estimated net income at $119 million, or 93 cents a share, for the three months ended June 30. Excluding a severance charge of $22 million, earnings are expected to be $141 million. UAL said its effective tax rate is zero for the period.
The airline's stock jumped 5.5% in midmorning trading on the Nasdaq Stock Market, trading at $28.43. Analysts surveyed by Thomson Financial had been expecting the company to earn 46 cents a share in the second quarter, a consensus estimate that had been just five cents a few weeks ago.
Take a peek at what to expect in the reports of other major companies.United, which stepped out of a 38-month stay in bankruptcy-court protection on Feb. 1, had disappointed with its first-quarter results, essentially a $306 million loss, which excluded a huge accounting gain tied to its reorganization. Its costs rose in the first quarter and its revenue performance wasn't a standout.
But the company's preliminary second-quarter numbers indicate it made progress on both fronts. UAL said it expects its revenue will be $5.1 billion, up 16% from a year earlier. Analysts were expecting revenue of $5.04 billion. Its mainline unit revenue, or the amount taken in for each seat flown a mile by its mainline jets, will be up 12% from a year earlier, the company said.
Industrywide, carriers have been able to boost airfares amid robust travel demand and, on some routes, reduced capacity.
United said its unit cost will come in 9% higher than a year ago. But if fuel, special charges and a one-time severance item were taken out, the Elk Grove Township, Ill., carrier said its unit costs would have declined by 1.6%.
The better-than-anticipated results come despite higher fuel costs that have hampered the airline industry. UAL expects to report that second-quarter average jet-fuel costs added 27% to $2.16 a gallon from $1.71 a gallon last year.
"We expect to report results that exceed current second-quarter consensus expectations because of the continuing benefits of our restructuring, strong revenue growth and our cost control efforts," said Glenn F. Tilton, United's president, chief executive and chairman, in a statement.
The company plans to report second-quarter earnings July 31.
For the current quarter, UAL said it has 28% of its planned fuel consumption hedged at $1.66 a gallon, excluding taxes. The company anticipates third-quarter capacity, which is measured by available seat miles, to increase by 3% to 3.5%.
UAL said the second-quarter guidance is designed to help potential investors assess a $726 million debt offering mandated by the company's bankruptcy reorganization to take place by Aug. 1.
Profit in Second Quarter
Associated Press
July 24, 2006 11:15 a.m.
CHICAGO -- UAL Corp., the parent of United Airlines, on Monday said it will likely report a stronger-than-expected profit for the second quarter, driven by double-digit operating revenue growth and cost controls.
UAL estimated net income at $119 million, or 93 cents a share, for the three months ended June 30. Excluding a severance charge of $22 million, earnings are expected to be $141 million. UAL said its effective tax rate is zero for the period.
The airline's stock jumped 5.5% in midmorning trading on the Nasdaq Stock Market, trading at $28.43. Analysts surveyed by Thomson Financial had been expecting the company to earn 46 cents a share in the second quarter, a consensus estimate that had been just five cents a few weeks ago.
Take a peek at what to expect in the reports of other major companies.United, which stepped out of a 38-month stay in bankruptcy-court protection on Feb. 1, had disappointed with its first-quarter results, essentially a $306 million loss, which excluded a huge accounting gain tied to its reorganization. Its costs rose in the first quarter and its revenue performance wasn't a standout.
But the company's preliminary second-quarter numbers indicate it made progress on both fronts. UAL said it expects its revenue will be $5.1 billion, up 16% from a year earlier. Analysts were expecting revenue of $5.04 billion. Its mainline unit revenue, or the amount taken in for each seat flown a mile by its mainline jets, will be up 12% from a year earlier, the company said.
Industrywide, carriers have been able to boost airfares amid robust travel demand and, on some routes, reduced capacity.
United said its unit cost will come in 9% higher than a year ago. But if fuel, special charges and a one-time severance item were taken out, the Elk Grove Township, Ill., carrier said its unit costs would have declined by 1.6%.
The better-than-anticipated results come despite higher fuel costs that have hampered the airline industry. UAL expects to report that second-quarter average jet-fuel costs added 27% to $2.16 a gallon from $1.71 a gallon last year.
"We expect to report results that exceed current second-quarter consensus expectations because of the continuing benefits of our restructuring, strong revenue growth and our cost control efforts," said Glenn F. Tilton, United's president, chief executive and chairman, in a statement.
The company plans to report second-quarter earnings July 31.
For the current quarter, UAL said it has 28% of its planned fuel consumption hedged at $1.66 a gallon, excluding taxes. The company anticipates third-quarter capacity, which is measured by available seat miles, to increase by 3% to 3.5%.
UAL said the second-quarter guidance is designed to help potential investors assess a $726 million debt offering mandated by the company's bankruptcy reorganization to take place by Aug. 1.
Jul 24, 2006 | 3:05 pm
#2
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Already being discussed - exactly 20 posts below this one.
Jul 24, 2006 | 4:19 pm
#4
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Since there is an existing thread about this here:
http://www.flyertalk.com/forum/showthread.php?t=582450
I am going to go ahead and close this for housekeeping purposes. Thanks for your understanding.
iluv2flu
Moderator, UA
http://www.flyertalk.com/forum/showthread.php?t=582450
I am going to go ahead and close this for housekeeping purposes. Thanks for your understanding.
iluv2flu
Moderator, UA