United Airlines parent UAL Corp. reported a $274 million profit for the second quarter, more than doubled from $119 million a year earlier, as it focuses on international growth and controls costs.
The results were the company’s highest second quarter net income in seven years and came to $2.31 in earnings per share, $1.83 in diluted earnings per share. That’s up from $1.01 per share in the second quarter of 2006, 93 cents per diluted share.
United is the largest carrier at Denver International Airport.
UAL’s operating revenues came to $5.2 billion in the quarter that ended June 30, up 2 percent from about $5.1 billion in the year-ago quarter. The airline said it had a 16 percent increase in international passenger revenue, while other operating and cargo revenues declined. United moved to reduce domestic capacity this year in response to weakening domestic yields.
“By acting decisively to reduce domestic capacity early on and continuing to execute on our international growth strategy, we stabilized our U.S. performance and are outperforming the industry internationally,” said United’s chief revenue officer John Tague in a written statement.
Some revenue declined due to United’s decision to stop carrying U.S. domestic mail.
The company grew its balance of cash and short-term investments to $5.1 billion at the end of the quarter.
United said it expects its mainline capacity to be down by up to 1 percent for the all of 2007, while it will grow its United Express regional operation capacity by 4 to 5 percent. Its international capacity will be up 3 to 4 percent while North America capacity will be down 4 to 5 percent.
The company’s operating expenses came to nearly $4.7 billion, down 3.6 percent from nearly $4.9 billion a year earlier. The company said it had a net gain of $17 million on fuel hedging contracts in the quarter, including $14 million in unrealized gains because of contracts settling in future periods.
United said it got a revenue benefit of $47 million from changing its Mileage Plus frequent flier program expiration date for inactive accounts to 18 months instead of 36 months, as announced in January. That counteracted the effects of a change in accounting method that decreased passenger revenues for the program.
Reach Denver Post staff writer Kelly Yamanouchi at 303-954-1488 or kyamanouchi@denverpost.com.
