(Corrects Thomson Reuters earnings estimate to $1.78 per share
from $1.75 per share)
* United posts $1.95/shr vs. Wall St estimates $1.78/shr
* Revenue rises 28.4 pct to $5.16 billion
* First adjusted quarterly profit since 2007
* Shares up 3.5 pct
(Recasts, CFO quote, background, details on traffic, outlook)
By Deepa Seetharaman
NEW YORK, July 20 United Airlines parent UAL
Corp UAUA.O reported its first quarterly operating profit
since 2007 on Tuesday, boosted by a 26.2 percent jump in
passenger revenue and its shares rose 3.5 percent.
Excluding items, earnings from operations were $430
million, or $1.95 per share in the second quarter, up from a
loss of $321 million, or $2.21 per share a year earlier.
Analysts, on average, had expected the company to post
earnings of $1.78 per share, according to Thomson Reuters
Operating revenue rose 28.4 percent to $5.16 billion.
Mainline unit revenue, or the revenue derived from the
seats on plans that United flies, rose more than 28 percent as
capacity fell 1.6 percent. International passenger revenue grew
"We expect our unit revenue growth to lead the industry
again this quarter, reflecting service improvements, strong
on-time performance and the capacity actions we have taken, all
of which improved both our yields and load factors," Chief
Financial Officer Kathryn Mikells said in a memo to employees.
Net income was $273 million, or $1.29 per share, compared
with $28 million or 19 cents per share a year earlier.
The airline plans to merge with Continental Airlines Inc
(CAL.N) by the end of 2010.
United last reported an adjusted quarterly profit in the
third quarter of 2007.
Airlines are widely expected to post better second-quarter
results as air traffic recovers from the recession. Capacity
cuts have positioned carriers to charge higher prices and
operate fuller planes.
United expects its mainline capacity to be roughly flat,
while its full-year capacity is expected to fall between 2.4
percent and 1.4 percent.
On a consolidated basis, which includes feeder airlines and
regional affiliates, United expects capacity to rise as much as
2.6 percent in the third quarter, while being flat to up 1
percent for the year.
UAL's shares rose 74 cents, or 3.5 percent, to $21.92 in
early Nasdaq trading.
On Monday, current industry leader Delta Air Lines Inc
(DAL.N) posted its highest quarterly profit in a decade but
revenue fell short of expectations and its third-quarter
outlook disappointed [ID:nN15228630].
(Reporting by Deepa Seetharaman; additional reporting by Karen
Jacobs in Atlanta, editing by Gerald E. McCormick and Derek