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Updated from 11:39 a.m. EDT

Shares of

Continental Airlines

(CAL) - Get Caleres, Inc. Report

hit a 52-week high Tuesday after the nation's fifth-largest carrier reported second-quarter earnings significantly higher than Wall Street analysts had anticipated.

The Houston, Texas-based airline reported quarterly earnings rose to $2.46 per share, the highest diluted earnings per share in company history, and 20% more than the analyst consensus of $2.05 per share, according to

First Call/Thomson Financial

. The company earned $1.73 per share in the same period a year ago.

For the quarter that ended June 30, Continental brought in revenue of $2.57 billion, a 17.9% increase from $2.18 billion in revenue generated in last year's second quarter. Profits rose 12.9%, to $149 million from $132 million.

James M. Higgins, an analyst at

Donaldson Lufkin & Jenrette

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, had initially estimated second-quarter earnings would be $2 per share - almost a half-dollar below the actual earnings reported. He called the company's second-quarter performance "remarkable," particularly in light of the more than 100% increase in the cost of fuel.

The airline acknowledged that higher fuel prices weighed on costs, driving up the cost per available seat mile by 10% compared to the same period last year.

Despite the increased costs, Continental's passenger capacity grew 6%, helping to increase revenue per available seat mile, a key airline statistic, by 10% from the year before - the carrier's first double-digit jump since 1996.

"Record traffic and yields have more than offset fuel increases," said Gordon Bethune, the carrier's chairman and CEO, in a prepared statement.

Continental, which plugs itself as the airline of choice for business travelers, saw its business traffic increase 2% from the previous year, to account for nearly half the airline's total domestic revenue. Traffic on its regional

Continental Express

jumped 44%.

Online bookings continued to grow during the second quarter, increasing 160% year over year. E-ticket sales as a percentage of total sales increased from 39% in the second quarter 1999 to 53% in this year's second quarter.

DLJ's Higgins expects to raise his earnings estimates and $60 target price for Continental Airlines to reflect Tuesday's unexpectedly high earnings announcement. The securities firm has a buy rating on the stock.

DLJ has done underwriting and provided investment banking services for the airline in the past three years.

Continental's class B shares, which trade in higher volume than its A shares, finished up 13/16, or 1.5%, at 53 13/16.