Continental posts profit with one-time gainsCHICAGO, Jan 20 (Reuters) - Continental Airlines Inc. on Tuesday reported a fourth-quarter profit, largely on gains from the sale of its stakes in two online reservation companies, and said high fuel prices would make it tough to break even this year.
The No. 5 U.S. airline, the second major airline to report results for the last three months of 2003, said its profit amounted to $47 million, or 67 cents per share, compared with a net loss of $109 million, or $1.67 per share, a year earlier.
Continental's results include an $85 million gain, primarily driven by the sale of its interests in online travel companies Hotwire, which was acquired by InterActiveCorp last year, and Orbitz Inc. , which went public last month.
Excluding those special items, the Houston-based carrier posted a loss of 58 cents a share for the quarter. On that basis, analysts had expected Continental to post a loss of 84 cents a share, with loss estimates ranging from 47 cents to $1.15, according to Reuters Research, a unit of Reuters Group Plc.
Chief Executive Gordon Bethune said the company's cost-cutting efforts have helped prepare it for a tough revenue environment in 2004.
"However, it's going to be a struggle to break even this year with persistently high fuel prices," he said in a statement.
Bethune, who last week announced he would retire earlier than planned at the end of this year, said in December that Continental was working to break even in 2004 as the industry tries to dig itself out of a huge financial hole.
U.S. airlines have been struggling to slash costs and revamp their strategies after an extended downturn which analysts say has permanently changed the way airlines do business. A slump in demand for business travel has left carriers lacking sufficient revenue to cover their high costs.
Delta Air Lines last week posted a narrower fourth-quarter loss but said it needs to cut costs further and forecast another big loss in the first quarter.
Continental said passenger revenue for the quarter was $2.1 billion, up 8.4 percent from a year earlier. But mainline yields, or average fares, stayed weak, down 2.1 percent year-over-year.
Mainline unit revenue, or revenue per available seat mile, rose 3.8 percent in the fourth quarter versus a year earlier, while mainline unit costs increased 2.6 percent during the same period, the airline said.
Continental said it ended the fourth quarter with $1.6 billion in cash and short-term investments, of which $170 million is restricted.
Shares of Continental slipped nearly 2 percent in the fourth quarter but more than doubled in 2003. They closed at $17.45, up 45 cents, on the New York Stock Exchange on Friday.
01/20/04 08:56 ET
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