Chicago – The parent of United Airlines said today it lost $61 million in the fourth quarter, missing Wall Street expectations after it was hit by a series of winter storms that grounded thousands of flights.
The announcement sent UAL Corp. shares down more than 5 percent.
“Our financial performance is steadily improving and these results would have been better without the significant storms in our two largest hubs,” said United chief executive Glenn Tilton. The airline cancelled about about 3,000 flights due to the December snowstorms in Denver and as much as $30 million of the reduced passenger revenue was due to the impact in Denver.
Chief operating office Pete McDonald said the impact of the Denver storm on Denver International Airport was unprecedented.
For the quarter that ended Dec. 31, the loss for the parent of the nation’s second biggest carrier amounted to 55 cents per share.
Revenue rose 5 percent to $4.6 billion from $4.4 billion a year ago, but still fell short of financial forecasts, despite a company warning earlier this month that predicted a “modest” operating loss.
On average, analysts surveyed by Thomson Financial forecast a quarterly loss of 35 cents per share and revenue of $4.7 billion.
The estimates typically exclude one-time items.
But there was good news.
The airline posted a $23 million operating profit, including a one-time $6 million gain in the quarter, compared to a $182 million operations loss during the fourth-quarter last year.
In the eleven months since emerging from bankruptcy protection in February, the company earned $25 million, or 14 cents per share.
“This has been a defining year for United,” CEO Glenn Tilton said in a message to employees. “We exited bankruptcy, completing our restructuring and creating a platform that has supported the work we have been doing throughout this year. With the court-restructuring behind us, we have been able to focus on our performance and on our customers.” UAL was in bankruptcy protection during the 2005 fourth quarter, when it lost $16.9 billion – most of which was related to reorganization charges.
Elk Grove Village, Ill.-based UAL said a series of crippling winter storms cost $40 million in passenger revenue when the carrier had to cancel nearly 4,000 flights in December.
The airline said it didn’t expect to increase its fleet in 2007 and forecast nearly flat capacity growth of 1 percent for the year.
It is the nation’s second largest airline by traffic after American Airlines, and the busiest carrier at Denver International Airport.
Today’s announcement comes as the airline industry begins to show signs of renewed strength.
American Airlines parent, AMR Corp., said Wednesday it recorded its third straight quarter in the black and its first profitable year since 2000, earning $231 million in 2006. Meanwhile, Southwest Airlines Co. said its profit fell 19 percent to $57 million.
Continental Airlines Inc. said it had its best year in 2006 since 2000. Despite losing $26 million in the fourth-quarter, Continental earned $343 million for the year.
United lost billions of dollars from 2000 until earlier last year when it posted back-to-back gains during the second and third quarter. The carrier officially reported a $22.9 billion on-paper gain for the first quarter of 2006, but that reflected a formal settling of accounts from bankruptcy and was not a true profit.
Excluding those reorganization items, it lost $306 million in that period.
