Continental Loss Down; Shares Fall on Forecast

Continental Airlines Inc. posted a narrower fourth-quarter loss as higher revenue and cost-cutting efforts offset sharply higher fuel costs, but executives at the nation’s fifth-largest carrier told analysts that they expected a “significant loss” in the first quarter of 2006. The company’s stock plunged after the news.

Chief Executive Larry Kellner said Tuesday that despite labor concessions and expansion of international flights, the Houston-based carrier couldn’t overcome record-high fuel costs and competition from low-cost carriers, most notably JetBlue Airways Corp.’s presence at Continental’s hub in Newark, N.J.

Continental shares fell $2.23, or 11%, to $17.24.

Continental’s fourth-quarter loss came to $43 million, or 53 cents a share, versus a year-earlier loss of $208 million, or $3.16. Revenue increased 17% to $2.85 billion.

Analysts surveyed by Thomson Financial had expected the company to post a loss of $1.68 a share on sales of $2.82 billion.

For the full year 2005, Houston-based Continental posted a loss of $68 million, or 97 cents a share, contrasted with a loss of $409 million, or $6.25, a year earlier. Excluding one-time items, losses totaled $205 million, or $2.93 a share.