Profit Plunges Again at Floundering United Continental Holdings, Inc.
On Wednesday afternoon, airline giant United Continental (NYSE: UAL) reported that adjusted earnings per share totaled $2.22 for the third quarter, beating the average analyst estimate by $0.10. United's adjusted pre-tax margin of 10.4% came in near the high end of its most recent guidance range.
Still, this could hardly be considered a good result. Adjusted EPS declined a whopping 29% year over year, as unit costs rose while unit revenue fell. Furthermore, United is bracing for another steep margin decline in the fourth quarter. While management has repeatedly stated that United Continental is on track to match or exceed Delta Air Lines' (NYSE: DAL) profit margin by 2020, United is actually falling further behind.
Back in July, United projected that passenger revenue per available seat mile (PRASM) would be roughly flat year over year in the third quarter. However, the combination of a self-inflicted price war and hurricane-related revenue losses led to a 3.7% PRASM decline instead.
Source: Fool.com
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