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Continental tops target
October 16, 2000: 11:02 a.m. ET

Strong fares, passenger traffic help No. 5 airline overcome rising fuel costs
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NEW YORK (CNNfn) - Continental Airlines, the nation's fifth-largest airline,

Monday overcame rising fuel costs to beat Wall Street earnings forecasts for the third quarter.

Excluding a one-time charge of $2 million for debt repayment, Houston-based Continental Airlines (CAL: Research, Estimates) reported income of $137 million, or $2.24 a diluted share, compared with $104 million, or $1.44, a year earlier. Analysts surveyed by earnings tracker First Call had expected $2.19 a share.

graphicFuel costs excluding taxes rose nearly 75 percent to an average of 84.18 cents a gallon from 48.70 cents a year earlier. But strong gains in passenger traffic, higher fares and controls of other costs helped the airline cope with the soaring fuel cost. Available seat-mile costs increased a more modest 9.3 percent.

Revenue passenger miles, which measure the total number of miles that customers pay to fly, increased 5.7 percent to 17.3 billion, while the average amount paid by customers for each mile flown rose 8.8 percent to 12.98 cents.

Together, the traffic and fare increases lifted revenue 15.8 percent to $2.6 billion from $2.3 billion a year earlier.

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For the first nine months, income excluding special charges slipped 5.3 percent to $304 million from the $321 million a year earlier. But a share repurchase program boosted earnings per diluted share, excluding special items, to $ 4.85 from $ 4.29. Year-to-date revenue rose 15.4 percent to $7.5 billion from $6.5 billion.

Continental is the first major airline to report results for the third quarter. Strong passenger demand and fares throughout the industry lead analysts to believe most major airlines will post improved profits despite rising fuel prices, although UAL Corp. (UAL: Research, Estimates), owner of United Airlines, the world's largest carrier, has warned it will see a loss in the period.

Continental stock rose 25 cents to $42.75 Monday. Back to top


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