CHICAGO (AP) – United Airlines is posting record profits despite lower revenue, thanks to lower jet fuel prices.
The airline’s new acting CEO is renewing his predecessor’s pledge to improve service and boost profit margins.
“The United family has had a challenging few weeks, but we have never felt more unified and are committed to making the right investments in our people and providing them the tools they need to deliver excellent service to our customers,” said Brett Hart, who was named acting CEO on Monday after Oscar Munoz suffered a heart attack.
Munoz had only been on the job 37 days after replacing the ousted Jeff Smisek, and United’s share price has suffered in comparison to its closest rivals during all the upheaval in leadership.
On Thursday, United Continental Holdings Inc. reported third-quarter net income of $4.82 billion, which included an income tax-related benefit of $3.22 billion. Without that and other one-time items, the airline said it earned $1.7 billion, or $4.53 per share.
The results beat Wall Street expectations. Ten analysts surveyed by Zacks Investment Research expected on average $4.49 per share.
Revenue fell 2.4 percent to $10.31 billion, although that still topped the $10.27 billion forecast by four analysts surveyed by Zacks.
Fuel spending plunged 38 percent. Lower energy prices saved United $1.19 billion. Labor costs eclipsed fuel to become the company’s largest single expense, at $2.53 billion, an increase of $190 million from the third quarter of 2014.
Hart has been United’s general counsel since 2010 after joining the airline from consumer goods seller Sara Lee. In a statement, Hart said that while Munoz is on medical leave his team his working to carry out an improvement plan that Munoz was developing. He said the company would focus on employees and invest in the company to improve profit margins. United has been plagued by technology problems and bumpy labor relations since the 2010 merger with Continental Airlines.
Shares of United Continental Holdings Inc. rose 45 cents to $55 in premarket trading Thursday.
From the end of August through Wednesday’s market closing, United shares dropped 4 percent while shares of largest competitors American, Delta and Southwest rose by between 12 percent and 14 percent.
United shares have declined 18 percent since the beginning of the year. The stock has climbed 10 percent in the last 12 months.
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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on UAL at http://www.zacks.com/ap/UAL
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