2nd qtr profit at CAL - Analyst
June 1, 2005, 12:36AM
Analyst says profit likely at Continental
By BILL HENSEL JR.
Copyright 2005 Houston Chronicle
Despite continuing high fuel costs, at least one analyst is projecting that Continental Airlines could turn a profit the second quarter.
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JP Morgan airline analyst Jamie Baker said he expects Houston-based Continental's revenue to jump this quarter compared with the same period last year.
"We believe both American and Continental will witness significantly better second quarters," Baker wrote in a report. "Continental is expected to cross the finish line; American is expected to fall just short."
Continental is set to issue its May performance report late today, and Baker said he expects the data to suggest a 9 percent increase in revenue.
Calyon Securities' airline analyst Ray Neidl disagrees. Neidl said he sees all of the nation's nondiscount carriers losing money during the second quarter, including Continental.
"I am projecting losses for everyone for every quarter," Neidl said.
The quarterly reports won't be out until after the end of the month. Continental in early April reported a first-quarter net loss of $184 million, citing high fuel costs and continued low fares, meaning less revenue.
Consultant Alan Sbarra of Roach & Sbarra said the fact that fare increases have stuck recently while oil is down from its highs could prove significant.
"I think that is a positive sign on the revenue side," he said.
Baker had earlier forecast a second-quarter loss of 50 cents per share for Continental, but has changed his outlook to a profit of 15 cents per share.
"Given the holiday peak and what we believe to be a $52 per barrel forecast, Continental is expected to have little trouble making it into the black," he said.
Continental declined to comment.