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Another Profit for US Airways

However, third-quarter revenue of $2.97 billion is shy of forecasts.
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Updated from 9:07 a.m. EDT

US Airways

(LCC)

reported its third consecutive quarterly profit, excluding one-time items, and said it expects to report positive net income in the fourth quarter, as well.

On a conference call, President Scott Kirby said the airline's revenue per available seat mile would grow by 10% in the fourth quarter, even though comparisons with earlier quarters are growing more difficult because pricing improvements started about a year ago.

"Comps are more difficult, but absolute RASM strength continues unabated," Kirby said, adding that he expects the airline to outperform the industry over the next two quarters. US Airways shares were up 1.9% to close at $49.43.

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During the quarter, US Airways lost an estimated $30 million to $40 million in revenue due to the August terrorist plot revelation and subsequent changes in security regulations. Kirby said the weakness was primarily in short-haul business, and it seemed to dissipate by October.

The airline said its third-quarter net profit, before items, was $101 million, or $1.09 a share, on revenue of $2.97 billion. Analysts surveyed by Thomson Financial had expected per-share earnings of $1.01 on revenue of $3.02 billion.

Including one-time items totaling $179 million, the company reported a loss of $78 million, or 88 cents a share. A year earlier, the company lost $99 million and $5.74 a share.

The airline was created by the September 2005 merger of America West Holdings and US Airways Group. At the former US Airways, revenue per available seat mile grew 15.8% to 13.68 cents.

Excluding items, the unit had a net profit of $109 million, compared with a loss of $80 million a year earlier. Stripping out fuel and one-time charges, the unit's cost per available seat mile decreased 0.4% to 7.63 cents, as capacity fell by 4.8%.

At the former America West, RASM rose 13.1% to 10.51 cents. Excluding items, the unit showed a profit of $3 million, reversing a loss of $19 million a year earlier. Taking out fuel and items, CASM grew 3.9% to 6.73 cents, while capacity fell by 3.9%.

Special items included an $88 million noncash charge to reduce the book value of fuel hedges, $27 million of merger costs and a $59 million noncash expense as previous operating losses were recognized as a reduction in goodwill rather than as a decrease in tax expense.