Continental Shares Down On Storms Costs
Continental Airline shares dropped on Tuesday after the carrier said it lost USD$25 million in revenue when a rash of winter storms in February triggered the cancellation of hundreds of flights.
The storm costs prompted Jesup & Lamont analyst Helane Becker to lower her first-quarter earnings-per-share estimates for Houston-based Continental to 6 cents apiece, from the previous 19 cents.
"I usually build something into my models for storms in the first part of the year, but nothing like USD$25 million," Becker said in an interview.
Continental shares fell more than 3 percent to $20.51 on the New York Stock Exchange.
Severe weather on February 10 and February 26 hurt operations at Continental's New York hub at Newark Liberty Airport, Continental said in its traffic report on Monday.
Becker estimated that the loss of USD$25 million in consolidated passenger revenue cost the airline 18 cents per share on a pretax basis. Consolidated figures include the performance of Continental's feeder airlines.
Becker said she expected other airlines to report the cost of the winter storms in upcoming traffic reports. Continental was the first airline to report February traffic data.
In its report, Continental said its mainline unit revenue rose between 5.5 percent and 6.5 percent from a year ago.
Capacity -- as measured by available seat miles -- fell 3.7 percent. Continental said cancellations from the two snowstorms last month cut into its February capacity.