Mesa Air Group ( MESA) said its second-earnings fell short of estimates, a result of expenses for moving aircraft from one customer to another and bad East Coast weather.

The Phoenix-based regional carrier said net income was $10.9 million, or 25 cents a share, in the quarter ended June 30, compared with $17.1 million, or 40 cents a share, a year earlier. Revenue rose to $339 million from $298.6 million because of reimbursed fuel expenses.

Excluding net investment losses of $600,000 in the quarter, Mesa said it earned 26 cents a share. Analysts polled by Thomson Financial had expected a profit of 32 cents on revenue of $338 million. Mesa's shares fell 73 cents, or 7.8%, to close at $8.65.

On a conference call, Mesa CEO Jon Ornstein said the results in the current quarter ending Sept. 30 "will come in slightly below estimates" because of lingering items including the residual impact of the fleet transition and additional scheduled aircraft maintenance. Analysts had estimated a profit of 37 cents a share.

For the second quarter, bad weather in June caused a $2 million revenue decline, the airline said. The impact was severe, because the terms of Mesa's flight arrangement with United Airlines ( UAUA) require that when weather limits flying, the lowest-revenue aircraft come out of service first. Mesa does the lion's share of United Express' flying to heavily congested East Coast airports, Ornstein said.

"The impact, when the weather is bad, is far greater than we or United anticipated," he said, but the carriers are working to reduce the burden on Mesa.

Mesa received a $9.7 million settlement in the US Airways bankruptcy case, which only partially offset $7.8 million in costs and $2.4 million in reduced revenue as it moved 59 jets with 50 seats from serving US Airways ( LCC) to Delta Air Lines ( DALRQ) and United.

The transition involved expenses such as crew training and long stretches when aircraft were out of service. Ornstein said all planes will return to service by September.

In a report issued Wednesday, Merrill Lynch analyst Michael Linenberg called Mesa's results "disappointing" and said he's maintaining a neutral rating on the stock. Mesa may find more opportunities to place airplanes, he wrote, but until then, "the stock is likely to remain range-bound." Merrill Lynch has a financial relationship with Mesa that includes acting as a market maker for its stock.

Ornstein said Mesa has incurred costs of less than $1 million for its new inter-island Hawaii service. The airline began Hawaii flying June 9 with three 50-seat aircraft, added two more on June 30, and now plans to add large regional jets next year. Load factors were 82.5%, and the results were better than expected, Ornstein said.

For the quarter, Mesa's revenue per available seat mile was 14.8 cents, up 16.5% from a year earlier, while cost per available seat mile rose 6.5% to 8.3 cents. Capacity fell 2.7% because of the fleet transition and severe weather.