* Alaska Air profit also better than expected
* Shares fall amid broader market slowdown
Jan 23 U.S. airlines United Continental Holdings
and Southwest Airlines reported
higher-than-expected fourth quarter profit on Thursday, aided by
strong revenue and lower fuel costs.
Airline shares fell as the broader market headed lower. Some
analysts said a weaker-than-expected revenue forecast from
United and profit-taking also pressured the sector.
Chicago-based United said unit revenue, a measure of
passenger revenue per available seat mile, would be flat to up 2
percent in the first quarter. The carrier cited January storms
and the Easter holiday shift into April this year from March in
2013 as drags on performance.
Delta had forecast a rise of 2 percent to 4 percent and
Southwest said its unit revenue for the first period would be
higher on a year-over-year basis.
Southwest shares were off 2.4 percent to $21.24 and United
fell 1.5 percent to $48.43 in afternoon trading. Alaska Air
Group, which also reported a higher profit
on Thursday, shed 0.6 percent to $81.35.
Jim Corridore, an analyst with S&P Capital IQ, said concern
about United's revenue outlook weighed on the sector.
The strong fourth-quarter results from Southwest and United,
which benefited from fare increases, followed a similar report
from Delta earlier this week.
American Airlines Group, the carrier formed by
December's merger of AMR Corp and US Airways, will report
results next week.
Most U.S. airlines have bounced back to profitability since
2010, and Corridore said he expected more solid results in 2014.
Carriers "are keeping a tight rein on capacity and are
looking to raise fares and price their product to earn a
sustained profit," Corridore said.
United earned $298 million, or 78 cents per share, in the
fourth period, as revenue rose 7 percent to $9.3 billion.
Analysts expected profit of 65 cents, according to Thomson
Net income at Southwest rose to $212 million, or 30 cents a
share, in the fourth quarter, from $78 million, or 11 cents a
share, a year earlier. Excluding items, profit was 33 cents,
compared with 29 cents expected by analysts. Southwest revenue
rose 6 percent to $4.43 billion.
Alaska Air, the parent of Alaska Airlines and Horizon Air
Industries, had quarterly earnings of $78 million, or $1.10 a
share adjusted for items. That compared with $1.07 expected by
analysts on average.