United, Like Other Airlines, Misses as Fuel Costs Rise
CHICAGO
) --
United Continental
(UAL) - Get Report
narrowly missed third-quarter estimates as rising fuel prices added $1 billion to its costs.
Excluding items, the carrier reported net income of $773 million, or $2 a share. Analysts surveyed by Thomson Reuters had estimated $2.08. Revenue rose 8.7% to $10.2 billion. Analysts had estimated $10.1 billion.
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Including $120 million in one-time items, primarily related to the integration with Continental following the merger, United reported net income of $653 million, or $1.69 a share.
Earlier this month, competitors
American
(AMR)
and
Delta
(DAL) - Get Report
also narrowly missed estimates, as fuel prices, sharply higher from a year ago, fell suddenly towards the end of the quarter.
During the quarter, United's consolidated passenger revenue per available seat mile rose a robust 10.1%, led by a 21% gain in Latin America. Domestic PRASM rose 10.9%.
On the cost side, fuel expense increased by $1 billion, excluding the impact of hedges. United took a $56 million charge, recorded in non-operating expenses, related to fuel hedge ineffectiveness. Consolidated cost per available seat mile, excluding fuel and special items, increased by 0.7%.
"Despite the difficult fuel price environment, the team did a good job managing costs in the third quarter," said Chief Financial Officer Zane Rowe, in a prepared statement.
United ended the quarter with $8.4 billion in cash and cash equivalents.
-- Written by Ted Reed in Charlotte, N.C.
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