Continental Beats Third-Quarter Estimates

HOUSTON (TheStreet) -- Continental Airlines(CAL Quote) reported a small third-quarter adjusted profit, beating estimates, as a sharp reduction in business flying was offset by reduced fuel costs.

Continental became the third major carrier to beat third-quarter estimates.

Excluding items and special charges, the company reported net income of $2 million, or 2 cents a share. Analysts surveyed by Thomson Reuters had estimated a loss of 6 cents a share. Revenue fell 20% to $3.3 billion, in line with estimates.

The net loss in the quarter was $18 million, or 14 cents a share. A year earlier, the net loss was $230 million.

Continental said results were adversely affected by significant declines in high-yield traffic as business travelers are flying less and purchasing lower-yield economy tickets. Revenue fell by $839 million from a year ago, but was offset by a $926 million decline in fuel expense.

Consolidated revenue per available seat mile fell 17.9% on a capacity decline of 4.5%. Consolidated load factor was a record 85.1%, up 3.1 points from a year earlier. Mainline RASM was down 19.1% on a capacity decline of 4.1%. The steepest RASM decline was 24.3% in Latin America; domestic RASM fell by 15.6%.

On the cost side, with fuel rates constant, cost per available seat mile increased 1%.

Continental said it will join the Star Alliance on Oct. 27, after completing its last scheduled SkyTeam flight on Oct. 24. On Nov. 1, Continental will begin a Houston-Frankfurt flight as well as flights from Houston and Cleveland to Washington's Dulles International Airport.