United Airlines parent
surprised no one with news this morning that it expects to post a loss in the third-quarter and possibly the fourth. The shortfall is blamed on flight cancellations, delays and higher costs for jet fuel and wages.
The airline was plagued with labor problems earlier this year. And higher oil prices are socking it to businesses, like airlines, that rely on fuel for their operations.
Two months ago, UAL said it would fall short of analyst forecasts for the second half of the year. The third-quarter estimate by 11 analysts is for 97 cents, while the fourth-quarter estimate by 10 analysts is for 63 cents, according to
First Call/Thomson Financial
analyst Michael Linenberg downgraded UAL to accumulate from buy and said he expects earnings to be under pressure for at least the next 12 to 18 months and possibly longer, citing higher labor costs. Merrill said it was not changing its 2001 estimates for UAL, but said it was "clearly at risk."
Merrill added that UAL's earnings could see significant upside if its proposed acquisition of
Meanwhile, the same report included positive comments about some of UAL's competitors, including