Continental, Southwest post profits

Continental Airlines Inc. and Southwest Airlines Co. reported first-quarter profits Thursday after flying more passengers and charging higher fares, overcoming disruptions from winter storms.

Continental, the fourth-biggest U.S. carrier, had earnings of $22 million, or 21 cents a share, compared with a year-earlier loss. Southwest, the largest low-fare airline, said net income jumped 52% to $93 million, or 12 cents, helped by a gain from contracts that lock in fuel prices in advance.

Their profits, along with the one reported Wednesday by AMR Corp.’s American Airlines, still may not prevent a loss for the industry. Analysts expect four of the eight biggest carriers to report first-quarter losses.

Shares of Houston-based Continental fell $2.59, or 5.9%, to $41.15. Dallas-based Southwest’s shares lost 29 cents to $15.37.

Continental, like American, gained the most from international flights. Southwest, which flies only in the U.S., posted slower growth in revenue from each seat per mile flown. Continental, American and other big U.S. carriers are adding capacity on overseas routes where low-fare rivals don’t fly.

Continental and Southwest both said revenue fell because of winter storms, which caused thousands of flight cancellations.

Continental’s per-share profit beat analysts’ expectations of 14 cents. It was the first time since 2001 that Continental had a profit in the first quarter, historically the industry’s weakest.

Excluding special items, Continental earned $26 million, or 25 cents a share. Sales rose 7.9% to $3.2 billion, and were reduced by about $10 million because of weather-related disruptions.

Excluding a gain from Southwest’s fuel-hedging program, first-quarter profit fell to $33 million, or 4 cents a share, matching the average of analyst estimates compiled by Bloomberg.