United Continental posts profit despite rising cost

United Continental Holdings reported a drop in quarterly profit, but the results topped expectations even as its fuel cost spiked. The company, formed from the union of United Airlines and Continental Airlines, said second-quarter net profit fell to $538 million (Dh1.97 billion), or $1.39 per share, from $611 million, or $1.57 per share, a year earlier when the companies were still separate. The results include $39 million in integration-related costs and other special charges. Excluding those items, the company earned $1.49 per share, compared with Wall Street forecasts for $1.43, according to Thomson Reuters I/B/E/S. Shares rose 0.8 per cent to $20.46 in pre-market trading. Article continues below ‘Impressive\' \"United has proved that it can earn consistent profitability in the face of escalating fuel prices and a sluggish economy, which is an extremely impressive accomplishment,\" said Morningstar analyst Basili Alukos. \"Looking ahead, fuel will continue to weigh on United and the industry.\" United Continental said revenue increased 10.3 per cent to $9.8 billion, while fuel costs rose 30.2 per cent to $3.2 billion. Soaring fuel costs in recent years slowed recovery in the airline industry after a downturn in the last decade. After the March 11 earthquake and tsunami in Japan, United Continental reduced capacity on Japan routes because of weaker travel demand. The cuts eroded second-quarter unit revenue by $100 million. The company ended the quarter with $8.6 billion in unrestricted cash, cash equivalents and short-term investments.