US airline results on Thursday provided more evidence that the industry recovery is on track, driving shares higher, but the bumpy economy remains a concern. Continental Airlines Inc, JetBlue Airways, and Alaska Air Group all handily beat Wall Street expectations, reporting stronger profits on big revenue gains driven by higher fares and new fees.
JetBlue shares were up 3.7 percent, Continental shares were 2 percent higher and Alaska Air rose 1 percent. The Arca Airline index gained 2.9 percent. Those reports followed profit reports from Delta Air Lines and United Airlines, a unit of UAL Corp, earlier in the week, reflecting the robust revenue trend on higher passenger demand. American Airlines, a unit of AMR Corp, narrowed its losses but triggered new concern among analysts that its growth potential could be limited.
US Airways said the US economic recovery was tepid and Delta's third-quarter outlook was characterised as conservative. Delta, however, forecast a full-year profit. Continental said its average fare-per-revenue passenger rose 20.6 percent. The carrier, which hopes to close its all-stock merger with United by year's end, posted net income of $233 million, or $1.46 per share, compared with a year-earlier net loss of $213 million, or $1.72 per share.
Excluding $24 million of merger-related costs and other charges, Continental reported a profit of $1.60 per share. Analysts on average had expected $1.51, according to Thomson Reuters I/B/E/S. JetBlue's net income rose to $30 million, or 10 cents per share, from $20 million, or 7 cents per share, a year earlier. Analysts on average were expecting earnings of 8 cents per share.
Comments
Comments are closed.