Houston, TX Oct. 31, 2001 (AP)--Continental Airlines reported a $3 million net profit in the third quarter thanks to an emergency cash infusion from the federal government, although earnings plummeted 98 percent from a year ago.
The profit, which amounts to 5 cents a share, came despite dwindling passenger loads in the wake of the Sept. 11 terror attacks. Last year, the Houston-based carrier recorded a profit of $135 million, or $2.26 per share, for the quarter ended Sept. 30.
Excluding the impact of the $154 million after-tax grant from the federal government and an after-tax charge of $54 million relating to severance packages, Continental said its operating loss was $97 million, or $1.76 per share. The operating loss beat the consensus estimate of analysts surveyed by Thomson Financial/First Call, who anticipated a loss of $2.25 per share.
Shares of Continental rose 61 cents, or about 4 percent, to $17.26 Wednesday morning on the New York Stock Exchange.
Third-quarter revenue declined by 15 percent to $2.22 billion from $2.62 billion a year ago, the company said, due to a combination of reduced spending by business travelers, a two-day shutdown of the nation's aviation system after the attacks and the lingering dropoff in air travel since.
Responding to lower demand after the attacks, Continental announced it would lay off 12,000 employees and reduce capacity by 20 percent systemwide. The company expects 3,500 workers to accept voluntary leave and early retirement incentives.
``Continental has been able to work through this challenging time thanks to the loyalty of our customers and extraordinary efforts of all of our employees,'' said Larry Kellner, president of Continental. ``We're optimistic about our future opportunities.''
Continental ended the third quarter with $1.2 billion in cash. The company said it continues to lose between $4 million and $5 million a day and that it expects to receive an additional infusion of $215 million from the federal bailout, known as the Air Transportation Safety and System Stabilization Act.
For the first nine months of the year, Continental's revenue declined 3 percent to $7.23 billion from $7.47 billion a year ago. Net income for the period was $54 million, compared with a gain of $298 million last year.
Copyright (c) 2000 The Associated Press