Continental Airlines ( CAL) says it expects to report a modest loss for the fourth quarter, but analysts continue to recommend the stock.

The Houston-based carrier reported Wednesday that fourth-quarter revenue per available seat mile grew between 4.1% and 4.4%, compared with the same month a year earlier. It said it expects to report a loss, given its cost estimates.

A consensus of analysts surveyed by Thomson Financial had projected earnings of 7 cents a share. Despite the forecast, Continental shares were up 6.2% at $43.81.

Susan Donofrio, an analyst with Cathay Financial, said in a report that Continental's revenue is in line with her previously lowered expectations. She maintains an outperform rating for the stock, with a price target of $63.

The rating is based on positive industry fundamentals as well as Continental's strength in international markets, relatively low valuation and "high earnings growth potential driven by its competitive cost structure and strong domestic revenue trends," Donofrio wrote.

Meanwhile, Calyon Securities analyst Ray Neidl reduced his fourth-quarter estimate to a loss of 4 cents per share. "It appears that yield and RASM increases, though strong year over year, were slightly weaker than our initial estimates," Neidl wrote in a report.

Neidl rates the stock "add" with a target of $46.

Continental reported that December consolidated passenger RASM grew 3.5% to 4.5%, while mainline passenger RASM climbed 5.5% to 6.5%. In November, consolidated passenger RASM rose 3.3%, and mainline passenger RASM grew 4.6%.

December load factors were higher, despite a 4.4% increase in consolidated capacity, the airline said. Mainline capacity rose 4.6%. Consolidated passenger load factor was 79.5%, up 1.8 points. The mainline load factor was 79.9 %, up 1.9 points. Both were monthly records.

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