April 12, 2007

US Airways expects small profit after problematic 1st quarter

US Airways expects to post a small profit in the just-ended first quarter, despite a trio of problems that plagued the airline's operations.

The Tempe airline, which posted some of the industry's best profits last year, said late Friday that a mid-March ice storm and a botched reservations-system changeover hurt revenue and expenses in March. February results also were negatively impacted by an ice storm.

"From an operational standpoint, we are happy to have the first quarter of 2007 behind us," President Scott Kirby said in a statement.

The airline's stock was off sharply in early trading Monday, but rebounded and closed up 1.6 percent, at $47.81.

US Airways didn't provide specifics on its first-quarter results, which will be reported later this month. Wall Street analysts, though, quickly slashed their earnings estimates based on the airline's general cost and revenue comments. Several now expect earnings of between 10 and 15 cents per share, excluding special items. That's down from previous estimates as high as $1 a share and a consensus estimate of 68 cents per share.

Last year, the airline earned 5 cents a share.

Kevin Crissey, airline analyst for UBS, said US Airways had a "bad quarter all around" in a report Monday, but said he expects the carrier's full-year results to be "fine."

Crissey has a "buy" rating on US Airways stock. His biggest concerns: higher fuel prices and US Airways' relative weakness in international markets, where revenue trends remain strong.

By Dawn Gilbertson. Contact: dawn.gilbertson@arizonarepublic.com
Via: www.azcentral.com

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