Continental’s Q3 profit at $237M
HOUSTON—Continental Airlines reported third quarter 2006 net income of $237 million, which includes a $92 million gain on the sale of a portion of the company’s investment in Copa Airlines. Excluding net special charges of $1 million and the $92 million Copa gain, Continental recorded net income of $146 million.
Operating income for the third quarter was $192 million—an $83-million improvement over the same period of 2005, despite fuel price increases costing over $155 million and the negative impact of increased security measures that took effect on Aug. 10. In addition, results for the third quarter of 2006 include a $42 million accrual for employee profit sharing, bringing the cumulative accrued profit sharing pool to over $100 million.
“Thanks to the hard work of my co-workers, we are delivering great results, both financially and operationally,” said Larry Kellner, Continental’s chairman and chief executive officer. “When we work together, we win together.”
Passenger revenue for the quarter increased 17.1 percent ($471 million) over the same period in 2005, to $3.2 billion, with double digit percentage growth in each mainline geographic region and in regional jet operations.
Continental continued its capacity growth during the quarter, growing its mainline capacity 8.6 percent and its consolidated capacity 9.1 percent compared with the same period in 2005.
[B]Operational Accomplishments[/B]Continental’s employees continued to work together to deliver a record third quarter systemwide mainline completion factor of 99.8 percent during the quarter, operating 28 days without a single mainline cancellation. The company recorded a U.S. Department of Transportation on-time arrival rate of 75.1 percent during the quarter, which was affected by bad weather, air traffic control ground delay programs, new security rules and record load factors.
“My co-workers did a tremendous job this quarter, and earned on-time bonuses for two out of the three months, despite operational challenges,” said Jeff Smisek, Continental’s president. “I couldn’t be prouder of them, and I’m delighted that our financial results have permitted us to accrue over $100 million of profit sharing for my co-workers.”
[B]Third Quarter Financial Results[/B]Continental’s mainline cost per available seat mile increased 5.9 percent in the third quarter compared to the same period last year, primarily due to record high fuel prices. CASM decreased 0.8 percent holding fuel rate constant and excluding employee profit sharing accruals and related payroll taxes, and special charges.
During the third quarter, Continental recorded net special charges of $1 million consisting of an $8 million settlement charge related to lump-sum payments to retiring pilots and a $7 million reduction of previous charges related to permanently grounded MD-80 aircraft.
Continental ended the third quarter with approximately $2.5 billion in unrestricted cash and short-term investments.
[B]Other Accomplishments[/B]Continental contributed $79 million to its pension plans during the quarter and an additional $70 million to the plans in October. The contributions bring its 2006 pension contributions to $246 million. Since the beginning of 2002, Continental has contributed more than $1.1 billion to its pension plans.
Continental has accrued a cumulative profit sharing pool of over $100 million through Sept. 30, 2006. The actual amount of profit sharing that the company will be able to distribute to employees on Feb. 14, 2007, depends on the company’s full-year financial results and may exceed or be less than $100 million. [B][I](PR)
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