Southwest Airlines Profit Plummets 72%

No-frills carrier Southwest Airlines Co. on Friday reported a sharp drop in first-quarter profit, saying its bottom line was hurt by cutthroat fare wars and the company’s aggressive expansion.

The Dallas-based carrier’s net income plunged to $11.8 million, or 8 cents a share, in the quarter ended March 31 from $41.8 million, or 28 cents a share, in the year-ago period. Operating revenue rose to $621.0 million from $619.4 million.

However, the airline said the aggressive pricing competition with rivals has eased, and it has corrected a costly problem with its computer reservation system.

* California Federal Bank rebounded from a year-earlier loss in the first quarter by slashing overhead costs and cutting the amount of money it set aside to cover problem loans.

The Los Angeles-based thrift said net income increased for the fourth consecutive quarter to $14.7 million, or 17 cents a share. A year earlier, the company lost $596.1 million, or $21.01 a share after a goodwill accounting charge of $274 million and a special loss provision of $280 million for the bulk sale of assets.

“Cost control continues to be a major initiative throughout the bank as we press for additional reductions from ongoing operations,” said Edward G. Harshfield, president and chief executive.

* Kellogg Co.’s first-quarter profit rose 6.6% as the largest U.S. cereal company introduced new products to compensate for falling domestic market share. Kellogg said net income was $196 million, or 89 cents a share, compared with profit from operations of $183.7 million, or 81 cents a share, a year earlier.

* Colgate-Palmolive said first-quarter earnings rose 4.6%, fueled by improving results in the United States and strong results in Latin America. The consumer products company said net income rose to $156.5 million, or $1.05 a share, from $149.6 million, or 98 cents a share, for the same period a year ago.

* Unisys Corp. said its first-quarter earnings declined 7.2% following the sale of its defense business to Loral Corp. The computer maker reported first-quarter income from continuing operations of $32.1 million, or 2 cents a share, compared with $34.6 million, or 2 cents a share, a year earlier.