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Continental posts 3Q loss
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October 31, 2001: 11:32 a.m. ET
But airline's shortfall is narrower than expected; some layoffs to be averted.
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NEW YORK (CNNmoney) - Continental Airlines reported a third-quarter loss excluding one-time items Wednesday that came in narrower than Wall Street had expected, as the air carrier saw travel start to recover after the Sept. 11 terrorist attacks.
The nation's No. 5 airline also said it would be able to avert 3,500 job cuts out of a total of 12,000 thanks to voluntary retirements and federal aid in the wake of the attacks in which hijackers slammed three jets into new York's World Trade Center and the Pentagon, killing thousands.
The report comes a day after US Airways Group Inc., the No. 6 airline, posted a larger-than-expected third-quarter loss but said it has enough cash and revenue coming in to keep operating despite ongoing losses.
Quarterly projections for airlines are dim as the entire industry is grappling with an unprecedented drop in air travel since Sept. 11. Consumers' jitters about becoming the next victim of an air attack and the slowing economy that has forced companies to trim business travel budgets and consumers to vacation closer to home have taken a toll on ticket sales.
Though the airlines are surviving through a slight improvement in sales and a federal bailout package, carriers have grounded planes by the dozens and announced tens of thousands of layoffs. Several are fighting just to survive.
United Airlines (UAL: down $0.06 to $13.60, Research, Estimates) CEO James Goodwin was booted last Sunday after he angered unions with his comments that the company was hemorrhaging money and that its future was in doubt after the attacks.
Analysts polled by First Call expect United Airlines to post a $13.21 loss in the fourth quarter compared with a $2.41 a share loss a year earlier.
However, investors saw a glimmer of hope in Continental's (CAL: up $1.00 to $17.65, Research, Estimates) better-than-expected numbers Wednesday, sending the company's stock up about 4 percent in early trading.
The Houston-based carrier posted a loss of $97 million, or $1.76 a share, before extraordinary items. That's narrower than the consensus forecast for a loss of $2.25, according to earnings tracker First Call. The company earned $2.24 a share a year earlier, excluding a one-time charge.
Including $243 million in federal aid after the Sept. 11 attacks and an $85 million pretax charge for severance and other charges, Continental posted a net profit of $3 million, or 5 cents a share. That's well below net profit of $135 million, or $2.21 a share, a year earlier.
Revenue fell 15.2 percent to $2.2 billion from $2.6 billion.
Third-quarter passenger revenue slipped 14.9 percent to $2.1 billion from a year ago. Revenue per available seat mile, a key gauge, declined 14.3 percent in the quarter.
ExpressJet Airlines, Continental's regional subsidiary, reported a 10.4 percent increase in revenue passenger miles.
During the quarter, Continental reinforced cockpit doors to improve security and said it is placing armed federal air marshals on its flights.
The company has been offering customers discount fares in an effort to encourage travel.
Continental also said it is in talks with Boeing Corp. (BA: Research, Estimates) about deferring some of its aircraft scheduled for delivery between 2002 and 2005. The airline has removed 64 jet aircraft from service since Sept. 11, 49 of which it grounded in the third quarter after the steep drop in air travel. 
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