US Air profit declines to $1.83 a share

Cost rise, lower fares cause 30% drop at No. 6 carrier

Airlines

July 22, 1999|By Robert Little | Robert Little,SUN STAFF

Higher costs and lower fares caused the second-quarter profit of US Airways Group Inc., parent of the country's sixth-largest airline, to drop 30 percent from the comparable period last year, officials said yesterday.

US Airways reported net income of $136 million for the quarter that ended June 30, not counting a one-time gain of $181 million. Net earnings were down from $195 million in the comparable quarter last year.

Without the one-time gain, earnings per share were $1.83, down from $1.95 in the comparable period a year ago.

Company officials warned a month ago that the Arlington, Va.-based airline's growth would slow to about 6 percent and that decreases in traffic and increases in labor-related costs would drive earnings down.

Quarterly revenue dropped slightly, from $2.3 billion to $2.29 billion. Operating expenses rose 4.4 percent, from $1.9 billion to $2 billion.

Wall Street analysts said the report was largely what they expected, particularly since the company had warned them in advance.

The carrier's earnings report showed a net quarterly profit of $317 million, or $4.26 a share, 63.4 percent more than in the comparable quarter last year. That included money from the sale of the reservations system Galileo International Inc., which earned the airline a pretax gain of $274 million.

The company also gained $16 million from the one-time disposal of other assets. On an after-tax basis, the two gains amounted to $181 million.

US Airways, including MetroJet, is the second-largest carrier at Baltimore-Washington International Airport, behind Southwest Airlines.

US Airways shares yesterday closed at $40, down 50 cents.

Pub Date: 7/22/99

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