NEW YORK (CNN/Money) - Continental Airlines posted a narrower first-quarter loss Monday than analysts forecast, as the nation's No. 5 airline said March was its first profitable month since the Sept. 11 terrorist attacks.

The Houston-based carrier lost $114 million, or $1.79 a share, excluding special charges. That's better than the $1.97 a share consensus forecast of analysts surveyed by earnings tracker First Call. The company posted net income of $9 million, or 16 cents a share, in the year-earlier period.

Including a $52 million after-tax charge related to the permanent grounding of aircraft, the company lost $166 million, or $2.61 a share, in the period.

Revenue fell 18.7 percent to $1.99 billion, affected by both a 7 percent decline in miles flown by paying passengers and a 9 percent drop in the average paid by passengers for each mile flown, indicating continued fare weakness.

Thursday, Continental announced a $20 across-the-board fare hike on all its discounted fares aimed at leisure travelers. But while most other major airlines matched that increase Friday and Saturday, Northwest Airlines did not follow suit, and early Monday Continental and US Airways became the first major carriers to roll back the fare hike, according to Tom Parsons, CEO of Bestfares.com. Delta Air Lines and America West Airlines followed suit and by the end of the day American Airlines and United Airlines -- the nation's two largest carriers -- had also dropped the fare hikes.

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"It's official - the first fare hike of 2002 is a bust," said Parsons.

Continental said it posted an operating profit in March. Among major airlines, only Southwest Airlines (LUV: Research, Estimates) has posted a profit since the Sept. 11 terrorist attacks. But Continental was one of the nation's most profitable carriers before the attacks, and the only one other than Southwest to post a profit in the first two quarters of the year.

But Continental warned April 2 that its expected return to profitability in the second quarter will be difficult in the current business environment. Analysts still forecast earnings per share of 28 cents in the second quarter, down from the 74 cents it earned a year ago.

Shares of Continental (CAL: down $1.19 to $28.82, Research, Estimates) closed off about 4 percent Monday as the sector saw stocks broadly lower due to the fare rollbacks.