United Profit Tops Estimates, Rebounding From First-Quarter Loss

United Continental Holdings Inc. (UAL), the only major U.S. airline to post a loss in the first quarter, reported a second-quarter profit that beat analysts’ estimates and authorized a $1 billion stock repurchase.

Profit excluding one-time items was $2.34 a share, the Chicago-based airline said today in a statement. The average of analyst estimates compiled by Bloomberg was $2.19 a share. Revenue rose 3.3 percent to $10.3 billion, matching estimates.

United’s leadership team, including Chief Executive Jeffery Smisek, has been under pressure to improve on the first-quarter loss of $489 million before some costs. The company blamed the loss in part on severe weather that forced it to ground 35,000 flights. Delta Air Lines Inc. and American Airlines Group Inc. posted profits that beat analysts’ first-quarter estimates.

The shares rose 3 percent to $47.40 at 7:30 a.m. in early trading in New York.

“Our team is focused on improving our operations and service and on continuing to improve year-over-year revenue performance and cost control,” Smisek said in the statement. “The $1 billion share repurchase program we announced today demonstrates our progress and commitment to increasing value for our shareholders and the confidence we have in our plan.”

United rose 13 percent on July 10 after it said a benchmark revenue gauge, revenue per seat flown a mile, rose 3.5 percent in the June quarter. While that beat its earlier forecast of 1 percent to 3 percent growth, Michael Linenberg, an analyst at Deutsche Bank in New York, suggested the company’s original estimate was too conservative.

United is one of several airlines that report earnings today, including American, Southwest Airlines Co., JetBlue Airways Corp. and Alaska Air Group Inc. Delta, the first U.S. carrier to release second-quarter results, posted a profit before some items of $1.04 a share yesterday, topping the average analyst estimate of $1.03.

To contact the reporter on this story: Michael Sasso in Atlanta at msasso9@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net Stephen West, James Callan

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