Airline profits beat Wall Street

United Continental Holdings and US Airways Group's profits topped Wall Street expectations, but the results fell from a year earlier as fuel prices skyrocketed. The much-smaller Alaska Air Group posted a profit that was in line with Wall Street forecasts.
"Revenues are going up, but costs are really, really up there. And that's because of fuel," said Helane Becker, an airline analyst with Dahlman Rose & Co.
She said travel bookings could be weaker in the second half of the year as economic weakness plagues the United States.
Shares of US Airways were off 1.3 percent in Thursday's trading on the New York Stock Exchange, while United Continental's shares were up 2 percent. The airline industry has been struggling to recover after a downturn that drained travel demand. Soaring fuel costs also burdened the embattled companies. Airlines, however, are on the mend thanks to capacity reductions and airline mergers.
United Continental, formed from the 2010 union of United Airlines and Continental Airlines, said second-quarter net profit fell to $538 million, or $1.39 per share, from $611 million, or $1.57 per share, a year earlier when the companies were still separate.
Excluding onetime items, the company earned $1.49 per share, compared with Wall Street forecasts for $1.43.
Its revenue rose 10.3 percent to $9.8 billion, while fuel costs rose 30.2 percent to $3.2 billion. Ray Neidl, senior aerospace specialist at Maxim Group, said recent fare hikes that offset fuel costs might not be sustainable in the second half of the year if travel demand falters.
US Airways' second-quarter earnings amounted to $92 million, or 49 cents per share, compared with $279 million, or $1.41 per share, a year earlier. Excluding about $14 million in special charges, US Airways said it earned 56 cents per share, beating a Wall Street consensus forecast for 53 cents per share.
Its revenue rose 10.5 percent from a year earlier to $3.5 billion and its fuel bill rose 53.8 percent to $948 million. Alaska Air Group, parent of Alaska Airlines, said its net income was $28.8 million, or 78 cents a share, for the second quarter, compared with $58.6 million, or $1.60 cents a share, a year earlier. Excluding items such as fuel-hedge losses of $1.21 a share, profit came to $89.6 million, or $2.44 a share, in line with Wall Street expectations.
Airline shares were mostly higher with the Arca airline index up 0.63 percent. Shares of United Continental rose 3.4 percent to $20.97 on the New York Stock Exchange.