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World Air Shares Soar

The air charter and cargo company raises its third-quarter outlook.
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Shares of

World Air Holdings


took off Thursday after the air charter and cargo company raised its third-quarter outlook.

The Peachtree City, Ga.-based outfit, which owns World Airways and North American Airlines, attributed its improved forecast to better-than-expected demand for military charter flights and a strong performance on North American's commercial flights to Guyana and Ghana. Also helpful was the cancellation of unprofitable flights to Hawaii.

World Air now expects third-quarter revenue of $215 million to $225 million, up from its previous guidance for $195 million to $205 million. Operating income is targeted at $22 million to $24 million, raised from an earlier range of $15 million to $17 million.

In reaction, shares jumped as much as 15% higher and recently were trading up 86 cents, or 8.7%, at $10.72.

Based on its new guidance, World Air is on track for third-quarter EPS of 47 cents, estimates Helane Becker, airline analyst at The Benchmark Co., a New York-based brokerage that does no investment banking. Year-ago EPS was 31 cents.

Before World Air issued the new guidance, the lone analyst surveyed by Thomson First Call -- Morgan Joseph's Kathleen Starrs -- was predicting third-quarter EPS of 32 cents.

World Air is turning a profit even as most U.S. carriers are posting huge losses, because it is able to pass along fuel-cost increases to the U.S. military and cargo customers. Commercial airlines haven't been able to fully pass those increases to customers, because low-cost competition and plentiful capacity have kept pressure on fares. High jet-fuel costs helped pressure

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to file for bankruptcy protection earlier this month.

Also Thursday, World Air said it would file audited 2004 financial results for North American Airlines by mid-October. The results originally were due in July.

The delay caused the


to tack an "E" onto the end of the company's ticker Thursday.

World Air has attributed its tardiness to slack financial controls at North American, which was privately held before World Air acquired it in April. World Air says it's working hard to remedy the situation, having replaced North American's controller and hired outside firms to beef up internal controls and processes.