CHICAGO ( TheStreet) - United ( UAL) shares were dropping Friday after the carrier projected less-than-expected third quarter international revenue. At least four analysts reduced estimates and Buckingham Research analyst Dan McKenzie downgraded shares to neutral. United shares were trading down $2.07 to $32. Nevertheless, shares are up 37% for the year. In its filing late Thursday, United said third-quarter growth in passenger revenue per available seat mile is approximately one point below prior guidance due to lower-than-expected results in international markets. "Transatlantic results were affected by lower-than-expected yields on certain interline tickets," the carrier said. "Also in September, additional competitive capacity in China resulted in lower than expected yields in the Pacific." The carrier said third-quarter PRASM would increase 2.5% to 3.5%, compared to prior guidance of 3% to 5%. Three years after the 2010 merger between United and Continental, analysts and investors remain uncertain about the combination's success. In a July report, JPMorgan analyst Jamie Baker noted that the second quarter of 2013 represented the ninth consecutive quarter of earnings declines for the carrier. In a note issued Friday, S&P Capital IQ analyst Jim Corridore wrote: "We think UAL is still experiencing integration pains as it works to fully digest its merger. "We think overall air travel demand remains strong but U.S. government issues present near term risk," said Corridore, who reduced 2013 and 2014 estimates but maintained a 12-month price target of $38. He now estimates 2013 EPS at $2.73 a share and 2014 EPS at $4.25. Analysts surveyed by Thomson Reuters had estimated 2013 EPS at $3.01 and 2014 EPS at $4.48. Wolfe Research analyst Hunter Keay also reduced estimates and said he continues to view Delta ( DAL) more favorably. "We continue to hold a skeptical view that United's margins (and stock price) should converge to Delta's within the investable future," he wrote on Friday. "We have yet to see a data-driven argument as to why this convergence should occur." Cowen & Co. analyst Helane Becker remained optimistic, retaining a price target of $39. In a report -- "Remaining Positive Despite Choppy 3Q PRASM" -- she said: "We believe the shares are likely to be under pressure today. However, we believe it provides a buying opportunity."
McKenzie, however, wrote that "shares have risen 23% over the past month and have near full valuation. "For investors who can look past our 6-12 month horizon, we still believe fares fetch $45-$50 over the course of the cycle because "United remains a fundamentally improving story," McKenzie noted. His price target remains $35. Follow @tedreednc -- Written by Ted Reed in Charlotte, N.C. >To contact the writer of this article, click here: Ted Reed