US Airways, AMR, Delta Post Lofty Profits
US Airways Group Inc., AMR Corp.’s American Airlines and Delta Air Lines on Wednesday reported earnings that surpassed analysts’ expectations as profit rose on higher fares, heavy passenger traffic and low fuel costs.
The carriers extended the wave of better-than-expected earnings that began Tuesday with Continental Airlines Inc., Northwest Airlines Corp. and America West Holdings Corp.
Delta posted an unexpectedly sharp 51% increase in profit for the last three months of 1997, citing strong demand from business fliers and its efforts to control costs. The Atlanta-based carrier earned $190 million, or $2.40 a diluted share, in the October-December period, compared with $125 million, or $1.63, a year earlier. Analysts had expected Delta to earn $1.87 a share.
US Airways also beat expectations by reporting a big jump in earnings, which it attributed to wage concessions won from its pilots in September. The Arlington, Va.-based airline said it earned $479.4 million, or $4.66 per diluted share, a leap from the year-ago period’s $27.1 million, or 8 cents. Most of the increase was attributed to a tax benefit of $466.9 million in the latest quarter, which also saw one-time charges of $125 million.
Excluding these items, earnings would have been $137.5 million, or $1.34. Analysts had expected earnings of $1.05 a share. US Airways, which changed its name last year from USAir, also announced plans to repurchase 2.3 million shares of common stock.
AMR said its earnings fell 27% compared with a year earlier, when it had a big gain from selling part of its computerized reservations system. AMR said its profit slipped to $208 million, or $2.33 a diluted share, from $284 million, or $3.08 a share, for the same period in 1996. Analysts had expected earnings of about $2.17 a diluted share. The latest period included an unspecified gain of $13 million, or 14 cents. The year-ago earnings included a $497-million gain.
In trading on the New York Stock Exchange, Delta shares fell $2.56 to close at $118; AMR shares fell $3.13 to $131; US Airways shares rose 38 cents to $63.75.
Technology: Compaq Computer Corp. said its fourth-quarter earnings rose 37% as the world’s largest personal computer maker sold more high-profit machines and said it’s weathering the Asian economic crisis. Net income rose to $667 million, or 84 cents a diluted share, in line with expectations. That’s up from $487 million, or 63 cents, in the year-earlier period. Profit was boosted by sales of bigger, more powerful machines, as well as servers and networking products. Compaq also said it expects to gain more market share and generate higher profit this year even with the turmoil in Asia.
Compaq Chief Financial Officer Earl Mason said shipments in Asia Pacific fell 1% and in Japan fell 16%, and he expects continued declines in those markets this year. Houston-based Compaq was expected to earn 83 cents a share, based on the average estimate of analysts.
* Texas Instruments Inc.’s fourth-quarter earnings more than doubled before charges resulted in a final loss, as sales of its specialty processors helped offset the erosion of computer memory-chip prices. The Dallas-based semiconductor maker reported profit from continuing operations of $219 million, or 55 cents a diluted share, up from $95 million, or 25 cents, in the year-earlier period. That was a nickel below the average forecast of 60 cents from analysts. Though the results lagged expectations, Texas Instruments forecast that sales in the semiconductor industry will rise 10% this year, up from 5% a year earlier.
Oil: Exxon Corp., the nation’s largest oil company, reported record profit for the fourth quarter, shrugging off a slump in oil prices and beating Wall Street’s estimates.
Exxon said it earned $2.5 billion, or $1.01 a share, versus year-earlier earnings of $2.4 billion, or $1. The rise came despite a drop in revenue to $34.5 billion from $37.5 billion.
Irvine, Texas-based Exxon said crude oil prices were $5 a barrel lower, on average, than a year earlier, cutting its U.S. exploration and production income to $418 million in the fourth quarter from $544 million a year earlier.
Ashland Inc. also reported stronger profit, thanks to a gain from the sale of a chemical unit. It earned $52 million, or 69 cents a share, in the fourth quarter, up from last year’s $36 million, or 48 cents.
Also: Caterpillar Inc.’s fourth-quarter earnings rose 18%, topping estimates, as strong overall sales helped the world’s largest maker of construction equipment overcome a slowdown in business in some Southeast Asian countries.
Caterpillar said net income rose to $451 million, or $1.22 a diluted share, from $381 million, or $1, in the year-earlier period. Analysts had expected earnings of $1.12 a share.
* Weyerhaeuser Co. reported flat earnings for the fourth quarter as the forest products giant restructured its wood and paper businesses. It posted earnings of $98 million, or 49 cents a share, unchanged from the year-ago period.
* Bell Atlantic Corp.’s fourth-quarter profit rose 6.8% as the regional phone company installed more lines, carried more calls and gained a third more wireless customers. Profit before charges and gains rose to $970.9 million, or $1.23 a diluted share, from $909.5 million, or $1.17, a year ago.
* First Union Corp.’s fourth-quarter earnings rose 5.3% before a charge related to its Signet Banking Corp. purchase, to $519 million, or 81 cents a diluted share, from $493 million, or 79 cents, in the year-earlier period.
* Donnelly Corp. reported net income for its fiscal second quarter ended Dec. 27 of $5.17 million, or 52 cents a share, compared with $3.92 million, or 40 cents, in the year-ago period. The current quarter included a one-time gain of about $4.6 million.
* Allegheny Teledyne Inc. reported improved fourth-quarter net income, excluding special items, of $76.6 million, or 44 cents per share, compared with $68.2 million, or 40 cents, a year ago.
