And the bad news keep on coming
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UAL(UAUA - Cramer's Take - Stockpickr), the parent of United Airlines, lost $537 million in the first quarter, more than analysts had estimated, and said it will lay off 1,100 workers and trim its fleet growth.
The loss, driven primarily by a $518 million increase in fuel costs, was equal to $4.45 a share. Analysts surveyed by Thomson Financial had expected a loss of $3.41. Revenue rose 7.7% to $4.71 billion, but fell short of the consensus Wall Street estimate of $4.75 billion.
In response, United announced staffing and fleet reductions. The carrier said it will cut 500 salaried and management jobs and about 600 union-represented workers by the end of the year.
Shares of UAL were losing 9% at $19.51, a 52-week low.
Looking out to the final quarter of the year, UAL said mainline domestic capacity will decrease by approximately 9% during the fourth quarter, on top of a 5% reduction in the same quarter of 2007. Also, consolidated capacity will be 4% lower than it was a year earlier.
The lower capacity will be driven by the elimination of 30 older narrowbody aircraft from United's fleet, which is 10 to 15 more planes than the carrier announced in March.
"The path to sustainable profitability requires us to fundamentally overhaul every facet of our business," said CEO Glenn Tilton in a prepared statement Tuesday. "Consolidation is only one of many changes needed together with capacity discipline, new revenue streams and elimination of assets that do not earn a sufficient return, particularly in this environment.
"The pressure of high energy prices and a weakening economy are a wake-up call that the pace of change must accelerate," he added.
During the quarter, mainline revenue per available seat mile, excluding items, rose by 8.6%, owing to strong passenger and cargo yields that were partially offset by lower load factors.
Mainline domestic passenger RASM grew by 11.1%, aided by a 6.4% capacity reduction, while international passenger RASM increased 5.5%, despite a 9.6% capacity expansion. Consolidated passenger RASM was up 8.3%. Cost per available seat mile, taking out fuel and special items, climbed 2.4%. UAL said it will target $400 million in nonfuel cost savings this year, raising its target from $200 million announced earlier.
http://www.thestreet.com/_yahoo/new...13111.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
UAL(UAUA - Cramer's Take - Stockpickr), the parent of United Airlines, lost $537 million in the first quarter, more than analysts had estimated, and said it will lay off 1,100 workers and trim its fleet growth.
The loss, driven primarily by a $518 million increase in fuel costs, was equal to $4.45 a share. Analysts surveyed by Thomson Financial had expected a loss of $3.41. Revenue rose 7.7% to $4.71 billion, but fell short of the consensus Wall Street estimate of $4.75 billion.
In response, United announced staffing and fleet reductions. The carrier said it will cut 500 salaried and management jobs and about 600 union-represented workers by the end of the year.
Shares of UAL were losing 9% at $19.51, a 52-week low.
Looking out to the final quarter of the year, UAL said mainline domestic capacity will decrease by approximately 9% during the fourth quarter, on top of a 5% reduction in the same quarter of 2007. Also, consolidated capacity will be 4% lower than it was a year earlier.
The lower capacity will be driven by the elimination of 30 older narrowbody aircraft from United's fleet, which is 10 to 15 more planes than the carrier announced in March.
"The path to sustainable profitability requires us to fundamentally overhaul every facet of our business," said CEO Glenn Tilton in a prepared statement Tuesday. "Consolidation is only one of many changes needed together with capacity discipline, new revenue streams and elimination of assets that do not earn a sufficient return, particularly in this environment.
"The pressure of high energy prices and a weakening economy are a wake-up call that the pace of change must accelerate," he added.
During the quarter, mainline revenue per available seat mile, excluding items, rose by 8.6%, owing to strong passenger and cargo yields that were partially offset by lower load factors.
Mainline domestic passenger RASM grew by 11.1%, aided by a 6.4% capacity reduction, while international passenger RASM increased 5.5%, despite a 9.6% capacity expansion. Consolidated passenger RASM was up 8.3%. Cost per available seat mile, taking out fuel and special items, climbed 2.4%. UAL said it will target $400 million in nonfuel cost savings this year, raising its target from $200 million announced earlier.
