Continental posts 2Q profit on big jump in revenue

[July 22, 2010]  DALLAS (AP) -- Continental Airlines Inc. is adding to the evidence that U.S. airlines are making a strong recovery from the recession.

Continental said Thursday it earned $233 million in the second quarter, nearly a mirror image of its $213 million loss a year ago, and its per-share earnings beat analysts' expectations. Revenue jumped by nearly one-fifth compared with a year ago.

The Houston company, which plans to combine with United's UAL Corp. to form the world's biggest airline, reported modest gains in traffic but a strong pickup in revenue per passenger this year on higher fares and extra fees.

U.S. airlines are reporting their strongest quarterly results in three years. After huge losses during the recession, Delta, United and US Airways combined to post $1 billion in earnings for the second quarter.

The rebound came with brutal cost-cutting that included the elimination of hundreds of flights each day by the major carriers. That reduced the supply of seats and drove up fares. Airlines are also making money by charging extra fees for checking bags and other services.

Continental said it earned $1.46 per share last quarter. Excluding charges such as money spent preparing for the United merger, the company said it would have earned $1.60 per share. Analysts expected $1.51 per share excluding special items.

Revenue rose 19 percent to $3.71 billion, which matched the forecast of analysts surveyed by Thomson Reuters.

A year ago, the company lost $1.72 per share on revenue of $3.13 billion.

Continental shares rose 70 cents, or 3 percent, to $23.98 in premarket trading.

[Associated Press; By DAVID KOENIG]

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