United’s 1Q loss narrows as fuel costs drop
The parent of United Airlines reported a smaller first-quarter loss on Thursday, as fuel costs declined and revenue rose 1 percent.
The first quarter is the slowest travel season of the year, and it’s not unusual for airlines to lose money then. This year, though, United’s biggest rival, Delta, posted a small profit for the period, and Southwest and US Airways made money, too. Some airlines have said that government spending cuts that began in March hurt business, but United made no mention of the cuts in its earnings release.
Fuel expenses fell 6 percent, helped by less flying, slightly lower prices per gallon, and bets on fuel prices. But labor costs jumped 12 percent. United Continental Holdings Inc. has been signing new wage deals that cover workers who came from both airlines, including a new pilot contract approved in December.
Losses totaled $417 million, or $1.26 per share, compared with a loss of $448 million, or $1.36 per share, in 2012’s first quarter. The Chicago-based airline would have lost 98 cents per share excluding one-time charges, including $70 million in expenses related to its merger with Continental. That beat the expectations of analysts, who had been expecting the company to post a loss of $1.09 per share.
Revenue rose a little more than 1 percent to $8.72 billion, matching analyst expectations. A measure of fares paid per mile rose 1.9 percent, though costs outpaced the fare growth. Per-seat costs rose about 7 percent.
In other earnings reported Thursday:
• Southwest Airlines’ first-quarter net income fell 40 percent to $59 million, or 8 cents per share. That’s down from earnings of $98 million, or 13 cents per share, a year ago. Without gains from fuel-hedging contracts, Southwest would have earned 7 cents per share, topping analysts’ forecast of 2 cents per share. Revenue totaled $4.08 billion, up 2 percent from a year ago.
• Exxon Mobil Corp. said earnings rose slightly in the first quarter as profits from chemicals production surged enough to offset declining production of oil and gas. Lower taxes also helped. The Irving, Texas, company reported Thursday that net income totaled $9.5 billion in the quarter, or $2.12 per share, on revenue of $108.8 billion. During last year’s quarter, Exxon earned $9.45 billion, or $2 per share, on revenue of $124.1 billion.
• Harley-Davidson’s first-quarter profit jumped 30 percent as it shipped more motorcycles to dealerships across the globe. The Milwaukee company said it earned $224.1 million, or 99 cents per share, from January through March. That’s up from $172 billion, or 74 cents per share, a year earlier. The company shipped more than 75,000 motorcycles to dealerships in the quarter, up from 64,000 last year. Revenue rose almost 10 percent to $1.57 billion from $1.43 billion.
• Dow Chemical Co. said its first-quarter net income rose 33 percent. ,he Midland, Mich.-based company earned $550 million, or 46 cents per share, up from $412 million, or 35 cents per share, in the same quarter last year. Excluding restructuring, debt and other one-time charges, Dow said it posted an adjusted profit of 69 cents per share. Revenue fell 2 percent to $14.38 billion from $14.72 billion.
• United Parcel Service Co. said its first-quarter profit rose 7 percent to $1.04 billion. The company’s adjusted profit was $1.04 per share. Daily package volume in the U.S. increased and company revenue rose 2 percent to $13.43 billion.
• 3M Co. said net income was just slightly higher from a year ago at $1.13 billion, or $1.61 per share. A year ago its net income was $1.59 per share. Revenue rose 2 percent to $7.63 billion. Revenue and profits were both short of analyst expectations of $1.65 per share and revenue of $7.81 billion.