UAL’s Net Income Rises; TWA Posts 1st Profit in a Year
United Airlines’ parent company on Tuesday reported better-than-expected earnings, and Trans World Airlines Inc. posted a profit for the third quarter, its first since last year’s crash of Flight 800.
UAL Corp., parent of United, the nation’s largest airline, said earnings rose 5% to record levels in the quarter. TWA said it earned $9 million in the period and has enough cash to get through the slow winter travel season.
Chicago-based UAL said earnings, excluding one-time items, rose to $499 million, or $3.75 a share, from $475 million, or $3.58, a year earlier. The results assume that all stock has been distributed to employees under an employee stock-ownership program that took effect in 1994. Analysts had expected earnings of $3.65 a share on that basis.
UAL shares rose $1.38 to close at $87.50 on the New York Stock Exchange.
The company cited a rise in passenger traffic and cost controls for the results.
Sales rose to $4.64 billion from $4.49 billion.
“We are very pleased with United’s third-quarter results, which set a new company record for a single quarter’s performance,” UAL Chairman Gerald Greenwald said in a statement.
Assuming all employee stock has not been distributed, net earnings were $579 million in the quarter, or $5.61 a share, up from $340 million, or $3.77, a year ago. The latest quarter includes a one-time gain of $235 million after taxes from the sale of UAL’s Apollo Travel Services reservation unit.
TWA, the nation’s No. 7 carrier, said it earned $9.4 million, or 17 cents a share, in the third quarter, contrasted with a loss of $10.8 million, or 24 cents, a year earlier. The profit was the first for TWA since Flight 800 crashed shortly after taking off from New York on July 17, 1996, killing all 230 people aboard.
Sales fell to $908 million from $1 billion. But the airline said expenses fell 14% and that average fares rose.
The St. Louis-based company also said it has modernized its fleet, paid off debt and taken other steps so that it uses less cash during the winter travel season, traditionally a slow one for major airlines. It also said average fares are expected to continue to improve.
“Thus we believe that we have the resources necessary to finance this airline through the winter season,” Chief Financial Officer Michael Palumbo said in a statement.
Some analysts had said the company would face a difficult winter if its finances did not improve.
TWA shares rose 38 cents to close at $7.31 on the American Stock Exchange.
At a Glance:
HFS Inc. said third-quarter earnings surged 85% amid higher revenue from its hotel and real estate businesses and the addition of vehicle-leasing and mortgage services from PHH Corp. The company, which owns real estate brokerages such as Coldwell Banker and Century 21, along with the Avis rental car company and the Ramada Inn hotel chain, said net income rose to $157.4 million, or 88 cents a share, from $84.9 million, or 50 cents, a year ago. The results were a penny higher than analysts’ expectations.
Zenith Electronics Corp. said its third-quarter loss from operations narrowed as cost-cutting measures offset a decline in videocassette-recorder sales. The consumer-electronics maker’s loss in the quarter narrowed to $32.2 million, or 49 cents a share before charges, from a loss of $40.2 million, or 61 cents, in the year-ago quarter.
Humana Inc. said third-quarter earnings rose to $44 million, or 27 cents per share, compared with $32 million, or 20 cents, a year earlier.
Estee Lauder Cos. said fiscal first-quarter earnings rose 17% to $61.8 million, or 47 cents a share, compared with $52.7 million, or 39 cents, in the year-earlier period.
Chubb Corp.’s third-quarter operating profit, excluding gains from investment sales, rose to $175.1 million, or $1.02 a share, from $154.3 million, or 87 cents.
