The largest U.S. airline -
United Continental Holdings Inc.
) - reported third quarter 2013 adjusted earnings of $1.51 per
share, much lower than the Zacks Consensus Estimate of $1.64.
Comparing year over year, the results improved from $1.35 per
share. Consistent progress in customer service, enhancement of
operations and aggressive promotional activities aided the
company's year-over-year growth.
Quarterly total revenue improved 3.2% year over year to $10.2
billion. The top line missed the Zacks Consensus Estimate of
$10.3 billion. On an annualized basis, Other revenues increased
25.0% and passenger revenues increased 1.6%. Both increases were
partially offset by Cargo revenues, which decreased 19.1%.
Airlines traffic, measured in revenue passenger miles, dropped
0.3% year over year to 55.9 billion. Capacity (or available seat
miles) slid 1.1% year over year to 65.0 billion, while load
factor (percentage of seats filled with passengers) improved 70
basis points year over year to 85.9%.
Consolidated passenger revenue per available seat miles (PRASM or
unit revenue) increased 2.7% year over year supported by 9.0%
growth in Atlantic PRASM, partially offset by a decrease of 9.4%
in Pacific PRASM.
Total operating expenses, excluding special items, increased 0.1%
year over year to $9.7 billion in the reported quarter.
Consolidated unit cost or cost per available seat mile (CASM),
excluding third-party business expense and special items, crept
up 2.9% year over year.
At the end of the third quarter, the company had $6.7 billion in
unrestricted liquidity, of which $1 billion was in revolving
credit facilities. During the quarter, United Continental
generated operating cash flow of approximately $237 million and
spent approximately $598 million.
Other Airline Stocks
Delta Air Lines Inc.
) third-quarter 2013 adjusted earnings of $1.41 surpassed the
Zacks Consensus Estimate of $1.34 while low-cost carrier S
outhwest Airlines Co.
) earnings of 34 cents where also ahead of the Zacks Consensus
Estimate of 32 cents.
United Continental - which operates with
JetBlue Airways Corp.
) - currently holds a Zacks Rank #4 (Sell rating).
DELTA AIR LINES (DAL): Free Stock Analysis
JETBLUE AIRWAYS (JBLU): Free Stock Analysis
SOUTHWEST AIR (LUV): Free Stock Analysis
UNITED CONT HLD (UAL): Free Stock Analysis
To read this article on Zacks.com click here.
We remain concerned about fluctuating fuel prices, competitive
threats, soft cargo demand, and a sluggish global economy.
However, we believe that the company will perform better in the
coming quarters from its renewed and upgraded jets, domestic and
international expansion of network, customer-friendly services
and promotional activities.