Burdened by the heavy costs of reworking its airplane leases and contracts, United Airlines reported a record $1.77 billion loss for the...
Burdened by the heavy costs of reworking its airplane leases and contracts, United Airlines reported a record $1.77 billion loss for the third quarter Monday to run its overall losses from nearly three years in bankruptcy to $9 billion.
United maintained that the huge charges are normal for a company nearing the end of a bankruptcy overhaul and pointed to a $165 million operating profit as evidence its restructuring is paying off.
“We have largely completed United’s restructuring work and we are on schedule to emerge from Chapter 11 in early February as we have announced,” Chief Executive Glenn Tilton told employees in a recorded message.
Even so, it was the company’s 21st straight quarter in the red, and the loss topped its previous record deficit of $1.47 billion for the fourth quarter of 2002, when it filed for bankruptcy.
Despite the continuing losses, analysts say the nation’s No. 2 airline has largely accomplished what it needed to do in bankruptcy.
The net loss for the July-through-September period amounted to $15.26 a share and compared with a loss of $274 million, or $2.38 a share, a year earlier.
Operating revenue rose to $4.7 billion from $4.3 billion.
Excluding the total of $1.8 billion in restructuring costs for the period, United said it would have had a net profit of $68 million. Operating earnings were $245 million better than the result from the third quarter of 2004.
The company said it spent $405 million more on fuel in the fall quarter than a year earlier or the result would have been even better.
The lease-restructuring costs made United’s net loss by far the largest of any U.S. airline to report third-quarter results, exceeding Northwest Airlines’ $475 million deficit. The parent firms of three carriers — Southwest Airlines, Alaska Airlines and Continental Airlines — all turned profits, while American Airlines had a $153 million loss.
Still to report are Delta Air Lines and US Airways. Both are to release results Nov. 9.Valero Energy
High crude prices help double profit
Oil refiner Valero Energy on Monday reported its third-quarter profit more than doubled due mostly to high crude prices and wide refining margins. The company also said it expects to post record earnings in the last three months of the year.
Valero, the nation’s largest refiner, also announced longtime CEO Bill Greehey will step down at year-end but that he will remain chairman and active in its operations.
Profit for the three months ended Sept. 30 surged to $858 million, or $2.94 a share. That compares with $431 million, or $1.57 a share, in the same period in 2004.
Excluding a $621 million inventory charge related to its September acquisition of Premcor, Valero’s earnings were $1.3 billion, or $4.37 a share. That beat the average estimate of $4.23 a share by analysts polled by Thomson Financial.
Refining margins were $13.43 per barrel in the third quarter, nearly double what they were in the same period a year ago.
Valero shares rose $5.74 to close at $105.24 Monday. A year ago the stock was selling for about $43.Occidental Petroleum
Premcor acquisition pumps up results
Occidental Petroleum, an oil and natural-gas exploration company, said Monday its income more than doubled in the third quarter, helped by substantial one-time gains and revenue growth of 35 percent.
For the third quarter, profit rose to $1.75 billion, or $4.25 a share, from $758 million, or $1.88 a share. Income from continuing operations was $1.74 billion, up from $759 million a year earlier.
Included is a $463 million gain resulting from Valero’s acquisition of Premcor, a $335 million tax benefit due to the reversal of tax reserves no longer required and a $98 million charge from the write-off of certain chemical plants.
Core earnings for the third quarter were $1.09 billion, or $2.69 a share, compared with $759 million, or $1.92 a share, a year ago.
Revenue rose to $4.06 billion from $3 billion, with oil and gas sales up 39 percent to $2.82 billion.
On average, analysts surveyed by Thomson Financial anticipated $2.63 a share for Los Angeles-based Occidental.
Shares of Occidental rose $1.98 to close at $78.88 Monday.
Compiled by The Associated Press