United Expects Profit Margin In Lower Range

United said its pretax profit margin for the second quarter will be in the lower range of its earlier outlook and said the strong US dollar has hurt demand from abroad.

The Chicago-based airline said it expects a pretax margin of 12 to 13 percent for the quarter ended June 30. Its prior forecast was for a pretax margin of 12 to 14 percent.

It said its quarterly capacity grew 2.3 percent from a year earlier, in the lower range of earlier guidance of 2.25 to 3.25 percent growth. Investors have called on US airlines to taper their capacity growth to match weaker demand.

United said it expects passenger revenue per available seat mile to have fallen between 5.25 percent and 5.75 percent year-over-year, within the range of the prior outlook.

The carrier said it expects gross capital expenditures were higher than it previously forecast for the quarter because of a change in timing of aircraft-related deposits. It now expects to have spent between USD$1.24 billion and USD$1.26 billion, up from prior guidance of USD$885 million to USD$905 million.

It said it had USD$5 billion in unrestricted cash and short-term investments at the end of the second quarter.