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Midway 4Q profit drops
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February 4, 2000: 10:36 a.m. ET
Niche airline cites higher fuel costs; may follow trend with ticket surcharge
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NEW YORK (CNNfn) - Niche carrier Midway Airlines Corp. posted a smaller-than-expected drop in fourth-quarter earnings, as profits were driven lower by increased fuel costs and revenue decreased due to customer Y2K concerns.
For the recently completed quarter, Midway (MDWY: Research, Estimates) earned $2 million, or 21 cents a diluted share, excluding one-time items, compared with the 16 cents predicted by analysts surveyed by earnings tracker First Call Corp.
In the year-ago quarter, the carrier earned $4.9 million, or 51 cents a share, excluding one-time items. Revenue in the quarter rose 4 percent to $57.9 million.
Including one-time items, the company earned $1.1 million in the quarter, or 12 cents a diluted share, down 68 percent from the $3.5 million, or 36 cents a share, in the year-earlier quarter. One-time items include a $1.4 million pre-tax amount for the retirement of four aircraft as well as a write-down of parts. Also, fuel costs increased 64 percent in the quarter to $8 million, and rose 16 percent for the year to $22.7 million.
The company's results follow a quarterly trend for the industry, as most major carriers saw a drop in profit, although many still beat estimates for the period. Last month, the nine largest carriers announced ticket surcharges to compensate for the increased cost of fuel.
Durham, N.C.-based Midway is also considering a ticket surcharge, said Steven Westberg, its chief financial officer. "We are tempted to do so. We have not done so yet, though," he said in an interview Friday.
For the year, earnings fell to $11.4 million, or $1.20 a diluted share, excluding one-time items, compared with $16.5 million, or $1.49 a share in 1998. Including one-time items, the company earned $9.4 million, or 98 cents a share, compared with $15 million, or $1.54 a share in 1998.
Annual revenue rose to 3 percent to $217.9 million.
The carrier, which serves 25 cities in 15 states mostly along the U.S. East Coast, has its main hub in Raleigh/Durham, N.C.
Its shares opened Friday at 6, unchanged from Thursday's close. 
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Midway Airlines
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