United Shares Fall on Glum Outlook Despite Strong Fourth Quarter (Update 1)

Updated to include first-quarter unit revenue guidance and analyst comment.

CHICAGO ( TheStreet) -- United ( UAL) beat Wall Street's earnings estimates as it reversed a year-earlier loss despite declining Pacific revenue. But shares were falling in premarket trading as the carrier issued disappointing current quarter unit revenue guidance. 

The carrier said fourth-quarter net income excluding items was $298 million, or 78 cents a share. Analysts surveyed by Thomson Reuters had estimated 65 cents. Revenue rose 7.2% to $9.3 billion, in line with estimates.

In the same period a year earlier, excluding items, United reported a fourth-quarter loss of $190 million, or 58 cents a share, as revenue fell 2.5% to $8.7 billion.

Including items, United reported net income of $140 million, or 37 cents a share ,in the fourth quarter of 2013 compared with a year-earlier loss of $620 million, or $1.87 a share.

Shortly after the opening bell, United shares were down $1.38 to $47.80,  reflecting disappointment regarding an investor update filed Thursday morning.  In the update, United projected first-quarter passenger revenue per available seat mile would be flat to up 2% on a capacity gain of 1%.

"To put this into perspective, Delta (DAL) recently guided to 1Q RASM of 2% to 4% on a roughly 2.5% increase in capacity" wrote Avondale Partners analyst Fred Lowrance, in a note. "We continue to need to see consistent outperformance from UAL relative to its closest peers in order to gain greater confidence in its ability to deliver on its robust earnings growth potential."

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