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Two airlines top forecasts
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July 18, 2000: 11:33 a.m. ET
Continental, Southwest 2Q profits rise; America West misses target
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NEW YORK (CNNfn) - Two of the nation's major airlines posted better-than-expected second-quarter profits Tuesday, as strong demand for seats helped them deal with soaring costs.
Continental Airlines, the nation's fifth-largest airline, and discount carrier Southwest Airlines actually managed to increase profits despite the fuel hikes.
But Phoenix-based America West Holdings Corp. saw profits slip well below forecasts after analysts excluded a gain the company posted on the sale of cruise and vacation packager from comparisons to their forecasts.
Houston-based Continental reported earnings of $153 million, or $2.46 a diluted share, before a special charge for early debt repayment. That beat the forecast of $2.05 a share by analysts surveyed by earnings tracker First Call.
 With the special charge, net income came in at $149 million, or $2.39 a diluted share. A year earlier, net income was $132 million, or $1.73 a share.
Fuel costs increased 107 percent in the quarter to $320 million from $154 million, as the average price rose to 81.17 cents a gallon from 42.59 cents a year earlier. Wages, the carrier's largest cost item, rose 14 percent to $712 million.
But strong travel demand helped drive the airline to improved profits. The passenger load factor, which compares miles traveled by paying passengers to the available seats, increased to 77.1 percent from 74.0, and fares and fuel surcharges helped raise the amount collected from each passenger. Passengers paid on average 13.38 cents per mile carried, up from 12.69 cents a year earlier.
All of that helped boost revenue 18 percent to $2.6 billion in the quarter.
For the first six months, net income slipped to $163 million, or $2.57 a share, from $184 million, or $2.43 a share, in the first half of 1999. Revenue rose 15 percent to $4.8 billion from $4.2 billion.
Shares of Continental (CAL: Research, Estimates) gained 1-13/16 to 54-13/16 in morning trading Tuesday.
Southwest profits rise with full planes
Dallas-based Southwest (LUV: Research, Estimates) easily cleared its earnings forecasts as it posted net income of $190.6 million, or 36 cents a share. First Call's forecast called for a 31-cent profit. The company earned $157.8 million, or 29 cents a share, a year earlier.
Fuel costs rose to $197.6 million from $102.9 million a year earlier.
Revenue increased 19.7 percent to $1.5 billion from $1.2 billion. Passenger traffic increased 15.7 percent, and the carrier's load factor rose to 74.3 percent, the highest in the company's history, from 73.1 percent a year earlier. Revenue per mile traveled also increased.
For the first six months Southwest, the nation's seventh-largest carrier, posted net income of $264.1 million, or 50 cents a share, up from $253.6 million, or 47 cents a share a year earlier. Revenue increased 18 percent to $2.7 billion from $2.3 billion.
Shares of Southwest climbed 1/4 to 21-3/8 in morning trading Tuesday.
America West can't clear fuel hike
America West (AWA: Research, Estimates) could not overcome the fuel price increases to improve on record profits of the year-earlier period.
The nation's eighth-largest airline reported net income of $27.3 million, or 74 cents a diluted share, excluding a $6.2 million after-tax gain on sale of its interest in National Leisure Group and the Vacation Store.
That exclusion, which was confirmed by First Call, left America West well below the First Call's forecast of 89 cents a share for the period.
A year earlier, the company posted record operating profit of $42.3 million, or $1.06 a share.
The company did a better job than Continental and Southwest limiting the impact of fuel through long-term fuel contracts that saved it $6 million. But fuel costs still increased 57 percent, or $30 million.
Second-quarter revenue was a record $604.8 million, up from $554.2 million a year earlier.
The carrier did not include six-month results in its earnings release.
America West shares lost 1/4 to 18 in morning trading Tuesday. 
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Continental Airlines
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