US Airways reports first post-merger profit
The Business Journal of Phoenix - 9:39 AM MST Tuesday
Higher fares and a cut in industry capacity pushed the Valley's hometown airline to a first quarter profit.
US Airways Group Inc. Tuesday reported net income of $65 million, or 76 cents per share, compared with a loss of $174 million, or $6.58 per share, a year ago. Excluding special items, the company posted a profit of $5 million, or 5 cents per share, compared with a loss of $16 million, or $1.09 per share, in the year-earlier quarter.
Wall Street analysts were expecting a loss of 17 cents per share, according to Thomson Financial Network.
The special items include a $90 million gain associated with the forgiveness by Airbus of a company loan, which represents the return of certain aircraft deposits previously paid to Airbus as restructuring fees in conjunction with the merger. In addition, the airline recognized a $26 million unrealized gain related to its fuel hedges.
The Tempe-based airline said the results are compared to America West's standalone results for the first quarter of 2005. America West did not merge with US Airways until in September 2005.
Operating revenue surged to $2.65 billion from $733 million a year ago.
"While we recognize we are early in the integration process and we have much work yet to do, these results highlight the tremendous value we have achieved through the merger of US Airways and America West," said Doug Parker, US Airways chairman, president and chief executive. "While fuel prices remain an industry problem, the merger synergies are allowing us to keep our non-fuel-related costs in line. Looking forward we anticipate a very strong spring and summer and now expect to be profitable for the full year 2006, even after accounting for merger-related expenses and with continued high fuel costs."
Wall Street liked the first quarter news, and US Airways stock was up nearly 7 percent to $50.86 in early afternoon trading, a gain of $3.56.
The company closed out the first quarter with $1.6 billion in unrestricted cash.
US Airways (NYSE: LCC) operates approximately 3,800 flights per day and serves more than 230 communities in the United States, Canada, Europe, the Caribbean and Latin America.
For more:
www.usairways.com.