Created: 10/24/2013 7:36 AM
The parent of United Airlines reported a third-quarter profit below analysts’ expectations as it absorbed a drop in revenue for flights to Asia _ a key market.
Chairman and CEO Jeff Smisek said United managers weren’t satisfied with the financial performance, "and are taking prompt actions to increase our revenue and operate more efficiently across the company." The company’s press release didn’t say what those actions would be.
United Continental Holdings Inc. earned $379 million, or 98 cents per share, for the quarter. If not for special charges, it would have earned $590 million, or $1.51 per share. That’s three cents a share less than expected by analysts surveyed by FactSet.
During the same period last year United had a profit of $6 million, or 2 cents per share.
Revenue in the most recent quarter rose 3 percent to $10.23 billion, also less than analysts had expected.
United has been struggling to absorb Continental after their 2010 merger. On Thursday, Smisek said the company has improved its operations and customer service to the point where it is competitive in those areas.
United is the world’s largest airline by traffic, but some customers avoided it after its service problems. Traffic fell slightly in the most recent quarter, and is down 1 percent for the year. Traffic at rival Delta Air Lines Inc. is up slightly so far this year.
United passenger revenue for Pacific flights fell 11 percent. It posted an 11 percent gain in revenue from Atlantic flying, and a gain of 0.4 percent in domestic revenue.
"Long-term we continue to like the company, however we believe the absolute short-term will not be pretty," Cowen and Company analyst Helane Becker wrote in a note shortly after United’s results came out.