United Continental Holdings Inc.
) - one of the leading U.S. airlines - reported solid performance
in the fourth quarter and full year 2013. Improved operations and
customer service were the key drivers.
In the fourth quarter, the company posted a profit of 78 cents
per share, beating the Zacks Consensus Estimate of 68 cents with
ease. Comparing year over year, the results improved considerably
from a loss of 58 cents per share.
Quarterly total revenue improved 7.2% year over year to $9.32
billion, which was also ahead of the Zacks Consensus Estimate of
$9.20 billion. On an annualized basis, passenger and other
revenues increased 5.9% and 22.2% respectively while cargo
revenues dropped 9.5%,
For full-year 2013, United Continental witnessed earnings of
$2.84 per share (ahead of our projection of $2.72 and up 78.6%
year over year) on revenues of $38.28 billion (up 3.0% from the
Airlines traffic, measured in revenue passenger miles, dropped
2.7% year over year to 49.2 billion. Capacity (or available seat
miles) improved 2.6% year over year to 59.7 billion, while load
factor (percentage of seats filled with passengers) improved 10
basis points year over year to 82.4%.
Consolidated passenger revenue per available seat miles (PRASM
or unit revenue) increased 3.2% year over year, supported by 7.0%
growth in Latin American and 2.2% growth in Atlantic PRASM,
partially offset by decrease of 5.0% in Pacific PRASM.
Total operating expenses, excluding fuel, profit sharing,
special charges and third party expenses rose 3.3% year over year
to $5.7 billion in the reported quarter. Consolidated unit cost
or cost per available seat mile (CASM), excluding fuel,
third-party business expense and special items, crept up 1.9%
year over year.
At the end of 2013, the company had $6.1 billion in
unrestricted liquidity, of which $1.0 billion was in revolving
credit facilities. In the fourth quarter, United Continental
spent approximately $760.0 million.
Other Airline Stocks
Delta Air Lines Inc.
) reported fourth-quarter 2013 results on Jan 21, with adjusted
earnings of 65 cents coming ahead of the Zacks Consensus Estimate
of 63 cents. The results, however, leaped 142.1% from the
year-ago adjusted profit of 28 cents.
Other carriers like
American Airlines Group Inc.
JetBlue Airways Corporation
) will release fourth quarter financial results on Jan 28 and Jan
United Continental currently holds a Zacks Rank #2, implying a
Going forward, the carrier will also benefit from its
restructuring effort by cutting $2 billion in annual costs
through reduced fuel cost by using more efficient planes. United
Continental aims to enhance productivity by slashing sourcing
cost, improving maintenance procedure and optimizing distribution
channels. However, a weak cargo market, soft performance by the
Asia-Pacific region and stiff competition remain the near-term
impediments for the company.
AMER AIRLINES (AAL): Free Stock Analysis
DELTA AIR LINES (DAL): Free Stock Analysis
JETBLUE AIRWAYS (JBLU): Free Stock Analysis
UNITED CONT HLD (UAL): Free Stock Analysis
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