Why United Continental (UAL) Stock Is Falling Thursday (Update)

Story updated at 4:15 p.m. with Thursday market close information

NEW YORK (TheStreet) -- United Continental (UAL) stock continued to fall Thursday after Lufthansa warned of lower profits for 2014 and 2015 on Wednesday.

Shares of United Continental closed down -6% to $42.56, and were falling -1.9% to $41.75 in after-hours trading.

In a statement Lufthansa said it now expects an operating profit of 1 billion euros (about $1.3 billion) in 2014, compared to its previous estimate of 1.3 euros to 1.5 billion euros for the year. The airline expects an operating profit of 2 billion euros for 2015, down from its previous estimate of 2.65 billion euros.

The lower forecast is due to increased competition from Gulf airlines that are hurting Lufthansa's U.S. and European business.

Lufthansa's warning dragged down many airline stocks including United, Delta Air Lines (DAL), and American Airlines (AAL).

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TheStreet Ratings team rates UNITED CONTINENTAL HLDGS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate UNITED CONTINENTAL HLDGS INC (UAL) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and poor profit margins."

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