This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

United Posts a Loss as Two Rivals Report Record First Quarters

Chicago ( TheStreet) -- United (UAL - Get Report)  reported a loss in a quarter when its two principal rivals reported record profit. United said severe winter weather was only partially to blame.

Excluding items, the carrier lost $489 million, or $1.33 a share. Analysts surveyed by Thomson Reuters had estimated a loss of $1.35. Revenue fell 0.3% to $8.7 billion, in line with estimates.

Severe winter weather widened the first quarter loss by approximately $200 million, United said, as the carrier's mainline on-time arrival rate was 74.3%.

Including $120 million in special items, the first-quarter loss was $609 million, or $1.66 a share.

"This quarter's financial performance is well below what we can and should achieve. We are taking the appropriate steps with our operations, network, service and product to deliver significantly better financial results," said CEO Jeff Smisek in a prepared statement. "The entire United team is sharply focused on accomplishing the goals we have laid out for long-term financial success."

In a note, Cowen and Co. analyst Helane Becker wrote, "United continues to frustrate us (and investors) with their inability to match the PRASM results of Delta (DAL - Get Report) (and the industry for that matter). We continue to believe that United as significant PRASM potential, but it appears the company has done little to achieve it." American (AAL)  and Delta both reported record first-quarter results.

Becker noted that United is forecasting current quarter PRASM growth of 1% to 3%, compared to her estimate of up to 3.2%.

During the quarter, United's consolidated passenger revenue per available seat mile fell 2%. Winter-related cancellations accounted for 1.5 points of the decline. Consolidated passenger revenue fell 2.3% to $7.4 billion, while ancillary revenue gained 7.6% to more than $21 per passenger. Domestic PRASM rose 1.4%, but PRASM declined in every international region, with Pacific PRASM showing the biggest dip at 6.3%.

"We recognize that we have lagged on revenue and are taking the necessary actions to remedy that," said Jim Compton, chief revenue officer, in a prepared statement.

On the cost side, cost per available seat mile excluding fuel and special items increased 3.1% on a consolidated capacity reduction of 0.3%. Overall CASM gained 1%.

"We are making good progress in reducing costs and delivering sustainable efficiencies, all while improving the product for our customers," said Chief Financial Officer John Rainey. "While we are not pleased with our first-quarter financial results, we are building a strong foundation that will result in improved financial performance."

United ended the first quarter with $6 billion in unrestricted liquidity, including $1 billion of undrawn commitments under a revolving credit facility.

Written by Ted Reed in Charlotte, N.C.

To contact this writer, click here.

Follow @tedreednc

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
DAL $45.66 0.00%
UAL $61.40 0.00%
AAPL $128.95 0.00%
FB $78.99 0.00%
GOOG $537.90 0.00%

Markets

DOW 18,024.06 +183.54 1.03%
S&P 500 2,108.29 +22.78 1.09%
NASDAQ 5,005.3910 +63.9670 1.29%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs