UAL Reports $64-Million Loss

UAL Corp., parent of United Airlines, reported a larger-than-expected loss in the third quarter, as flight cancellations and delays and higher costs for fuel and wages hurt results.

The world’s largest airline company also said reduced capacity levels to address its operational problems, costs from its new pilots’ contract as well as other labor contracts and higher fuel prices will also lead to a loss in the fourth quarter.

The problems at UAL helped push profit up 6.1% at rival Northwest Airlines Corp., but losses widened at Trans World Airlines Corp.

UAL said it lost $64 million, or $1.29 a share, in the latest quarter, versus a profit of $359 million, or $2.89 a share, a year earlier. The last time the company lost money was in 1993. Revenue rose 1.2% to $4.91 billion.

Analysts on average were expecting a loss of 54 cents at UAL, with estimates ranging from a loss of $1.15 to a loss of 20 cents.

However, shares of UAL rose $2.31, or 6.4%, to $38.63 on the New York Stock Exchange as airline stocks rebounded broadly from losses sustained Wednesday.

United’s results suffered from thousands of labor- and weather-related flight cancellations and delays this summer as the airline negotiated a labor contract with its pilots.

United agreed on a new contract with its pilots in late August, putting their wages 10% to 12% above the industry’s top pay.

UAL, which has agreed to acquire US Airways Group Inc. for $4.3 billion, had warned twice during the third quarter that its results would fall short of analysts’ forecasts for the second half of the year. Before the last warning in September, analysts were expecting earnings of 97 cents.

US Airways on Wednesday reported that its third-quarter loss narrowed to $30 million, or 45 cents a share, from $88 million, or $1.23, a year earlier, amid higher fuel costs and increased competition. Analysts had expected a much smaller loss of 19 cents. Sales rose 14% to $2.4 billion.

Northwest said its profit rose 6% to $191 million, or $2.06 a share, beating expectations of $1.98, on higher passenger traffic in the U.S. and overseas. Revenue rose 12% to $3.18 billion.

TWA’s loss from operations widened to $45.2 million, or 62 cents a share, from $36.2 million, or 61 cents. Sales increased 11% to $972.7.

On the New York Stock Exchange, UAL closed up 50 cents at $36.81, Trans World declined 2 cents to close at $1.43, and US Airways rose $2.31 to close at $33.44. Northwest rose $1.31 to close at $22.31 on Nasdaq.

At a Glance

Other earnings, excluding one-time gains or charges unless noted, include:

TECHNOLOGY:

*Atmel Corp. said third-quarter profit soared fourfold to $76.5 million, or 16 cents a share, a penny better than estimates, from $17.3 million, or 4 cents, a year ago, as revenue rose 56% to $530.4 million.

* Commerce One posted an operating loss of $14.7 million, or 9 cents a share, beating forecasts of 12 cents, as revenue climbed to $112.7 million from $10.4 million. A year ago, Commerce One had a loss of $10.3 million, or 7 cents.

* Compuware Corp.’s profit dropped 78% in its fiscal second quarter to $23.6 million, or 6 cents a share, a penny better than estimates, as revenue fell 14% to $486.3 million.

* EBay Inc.’s third-quarter earnings soared to $19.1 million, or 7 cents a share, beyond expectations of 4 cents, from $3 million, or 1 cent, a year ago. Revenue jumped to $113.4 million from $58.5 million.

* Emulex Corp. reported fiscal first-quarter net income of $12.9 million, or 33 cents a share, compared with $6.8 million, or 18 cents, a year ago. That beat analyst estimates of 26 cents, and Emulex shares--already up 14% in regular trading Thursday--surged another $12.50 a share to $160.50 in after-hours trading. The Costa Mesa-based company said sales jumped 92% in the quarter to $55.5 million.

* Exodus Communications Inc. reported an operating loss of $60.6 million, or 14 cents a share, better than the 18 cents analysts expected. Including one-time items, its net loss widened to $69.5 million, or 17 cents, from $31.5 million, or 9 cents, a year ago. Sales more than tripled to $229.6 million from $68 million.

* MP3.com Inc. reported a third-quarter loss of $6.1 million, or 9 cents a share, beating analyst forecasts for a loss of 12 cents, as revenue climbed to $20.5 million from $4.1 million a year ago. The online music company had posted a loss of $17.8 million, or 30 cents, a year ago.

DRUGS:

* American Home Products Corp. said third-quarter profit rose 18% to $762.1 million, or 58 cents a share, in line with forecasts. Revenue grew 13% to $3.68 billion, led by higher sales of its Effexor XR antidepressant, Protonix ulcer drug and Enbrel, a medication for rheumatoid arthritis.

* Bristol-Myers Squibb Co. reported a 13% increase in third-quarter profit to $1.24 billion, or 62 cents a share, a penny better than analysts expected. Revenue rose 5% to $5.3 billion, boosted by higher sales of its cholesterol drug Pravachol and Avapro, for high blood pressure. Sales of Taxol, its top-selling cancer drug, rose 11% to $417 million.

OTHER INDUSTRIES:

* Allstate Corp. said its third-quarter earnings jumped 34% to $537 million, or 72 cents a share, 2 cents better than forecasts, driven by strong growth in its auto and homeowners insurance lines and lower catastrophe losses. Revenue rose 14% to $7.44 billion.

* Baxter International Inc. posted a third-quarter profit increase in line with expectations, but warned that its earnings for fiscal 2001 will miss forecasts, citing the weak euro. The maker of medical supplies said earnings in the latest quarter rose to $231 million, or 77 cents, in line with forecasts, as sales grew 6.2% to $1.69 billion. Baxter revised its 2001 profit expectations to “low double digits” from the “mid-teens.” Analysts were expecting $3.52 a share for 2001. Europe is Baxter’s largest market after the U.S.

* Brunswick Corp.’s third-quarter operating earnings rose 20% to $57.7 million, or 66 cents a share, topping forecasts of 60 cents, on strength in its boat, fitness and bowling units. Sales rose 9% to $939 million.

* General Dynamics Corp. said its third-quarter earnings rose 11% to $204 million, or $1.02 a share, a penny better than forecasts, led by sales of Gulfstream jets and information-technology services. Sales rose 13% to $2.5 billion.

* MGM Mirage Inc.’s earnings climbed 73% to $73.2 million, or 45 cents a share, well beyond estimates, with a boost from its acquisition earlier this year of Mirage Resorts. Revenue rose 8% to $1.1 billion.

* McDonald’s Corp.’s profit rose 1.4% in the third quarter to $548.5 million, or 41 cents a share, in line with forecasts, as sales rose 8.8% to $3.75 billion.

* Sears, Roebuck & Co. said earnings rose 4.9% to $278 million, or 81 cents a share, in the third quarter, a penny better than expectations, led by profit in its credit division. But Sears warned that its fourth-quarter earnings may fall below a year ago, with a decline in profit from its credit business. In the latest quarter, profit at the credit unit grew 22% as Sears cut marketing and collection costs. Revenue rose 4.7% to $9.63 billion. Demand for appliances, cosmetics, sporting goods and home-related items helped Sears overcome a slump in demand for summer clothing.

* Union Pacific Corp.’s third-quarter earnings rose 17% to $256 million, or $1 a share, beating forecasts of 97 cents, as the railroad operator hauled more cars, trucks and coal. Sales rose 6.1% to $3.07 billion.

* United Parcel Service Inc. posted a 22% increase in profit to $702 million, or 60 cents a share, 2 cents better than expectations, for the third quarter, benefiting from growth in both its international and domestic U.S. package markets. Revenue grew almost 10% to $7.4 billion. * Weyerhaeuser Co. said third-quarter profit fell 16% to $199 million, or 90 cents a share, as a slowdown in housing construction led to lower lumber prices. Sales rose 18% to $3.69 billion, aided by acquisitions. The results beat the 88-cent consensus estimate.