Continental reports $71M pretax profit for 4th quarter

Continental Airlines, which is still working on calculating its final quarterly and full-year financial results, reported Thursday it had a pretax profit of $71 million for the fourth quarter on better-than-expected revenue of $3.52 billion.

But the carrier is delaying its report of its net income figures while it decides the size of a non-cash accounting charge it will take in the last three months of the year related to pilot pension liabilities. Continental expects to make that determination by by mid-February and report final results for 2007 in its annual report.

Continental said its pretax profit for the October-December period contrasted to a loss of $26 million a year earlier.

Revenue grew nearly 12% to $3.52 billion from $3.16 billion a year ago, helped by a 27.5% jump in passenger revenue from trans-Atlantic flights and a nearly 10% rise from domestic flights.

Excluding previously disclosed one-time items, the company said the pretax profit was $24 million versus a loss of $4 million in the 2006 period.

For fiscal 2007, Continental reported pretax profit grew 53% to $566 million from $369 million a year earlier. Excluding charges and gains, pretax earnings rose 78% to $542 million from $304 million in fiscal 2006.

Revenue climbed 8% to $14.23 billion from $13.13 billion a year ago, with increases across all regions driving strong passenger revenue.

Analysts surveyed by Thomson Financial had expected revenue of $3.51 billion for the fourth quarter and $14.22 billion for the full year.

"We continued to grow our passenger revenue at a pace significantly greater than our capacity growth, which is a testament to our excellent pricing and revenue management, operational and marketing performance," said Jeff Smisek, Continental's president.

The airline said fuel hedging and increaed fuel efficiency helped offset rising crude prices, which topped $98 a barrel during the quarter. Jet fuel is one of the industry's top costs.

On Wednesday, the carrier said it expects to record a non-cash tax charge of $70 million to $140 million in the fourth quarter to boost its tax valuation allowance.

The charge stems from a December change in federal law increasing the mandatory retirement age for pilots to 65 from 60, which resulted in a decrease in the company's pension liabilities.
Source : http://www.usatoday.com