Continental’s Earnings Fall but Still Beat Expectations

Continental Airlines Inc. said Monday that its second-quarter profit sank 72%, hurt by cutbacks in lucrative business travel, but the results beat analyst forecasts.

Houston-based Continental’s earnings fell to $42 million, or 74 cents a share, from $149 million, or $2.39, a year earlier, as revenue fell slightly to $2.56 billion from $2.57 billion.

Analysts on average expected profit of 58 cents a share, according to First Call/Thomson Financial.

The company said it benefited from strong employee morale, on-time flights and solid customer service.

Aviation experts have expected the industry to post hundreds of millions of dollars in second-quarter losses, but they forecast that Continental and low-fare airline Southwest Airlines Co.--both of which are popular with leisure travelers--will buck the trend and report profits.

Shares of Continental rose $1.12 to $52.12 on the New York Stock Exchange.

In other earnings news, Alcan Inc. said its second-quarter profit dropped 27% to $105 million, or 33 cents a share, hurt by lower aluminum prices. The results fell well below analyst expectations of 57 cents a share.

The world’s second-largest aluminum producer said sales rose 55% to $3.1 billion, helped by an acquisition.

Alcan shares fell $4.65, or 11%, to $39.11 on the NYSE.

Eaton Corp., the second-largest maker of hydraulic equipment, said second-quarter profit fell 46% to $66 million, or 94 cents a share, as revenue fell 14% to $1.87 billion.

Analysts had revised their expectations down to 90 cents a share from $1.21 after Cleveland-based Eaton warned of weaker results three weeks ago.

Eaton shares lost 42 cents to $71.85 on the NYSE.