United Posts Smaller Loss

CHICAGO (TheStreet) -- United(UAUA Quote) posted a lower loss and beat third-quarter estimates.

The company said it reduced costs even as revenue shrank by 20%.

The first network carrier to report third-quarter earnings also said that looking ahead, it anticipates improving unit revenue.

Excluding items, the third largest carrier said it lost $63 million or 43 cents a share. Analysts surveyed by Thomson Reuters had estimated a loss of 94 cents. During the same period a year earlier, excluding items, the carrier lost $265 million. Revenue was $4.4 billion, ahead of the estimated $4.3 billion.

The net loss was $57 million or 39 cents a share. The company recorded $131 million in cash losses on fuel hedges that settled in the quarter, offset by $123 million in cash collateral returned during the quarter.

During the quarter, passenger revenue per available seat mile fell by 14.7%, representing a 2.5 point improvement over the 17.2% decline in the second quarter. Domestic PRASM fell by 14.2%, while domestic capacity fell by 10.2%. International PRASM fell by 20.3%. The biggest decline, 26.7%, was in Latin America, where capacity fell by 18.4%. Regional affiliate capacity increased by 15.3 %.

Ancillary revenue including bag fees totaled $289 million or $13 per passenger, resulting in a 0.9 point improvement in PRASM.

"With the work we have done and the strength of our network, we are poised to see better year-over-year unit revenue performance as economies begin to recover and business travel returns," said CEO Glenn Tilton, in a prepared statement.