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UAL Earnings Up 5 Percent; Delta Slumps; Midway Loss $11 Million In Quarter

July 26, 1990

Undated (AP) _ United Airlines parent UAL Corp. posted a 5 percent gain in second- quarter profits on Thursday, partly because of gains from aircraft sales, while Delta Air Lines said its net income tumbled by 61 percent due to competition and rising fuel prices.

Separately, Chicago-based Midway Airlines Inc. posted an $11.4 million net loss during the three months ended June 30. UAL

UAL said it had net income of $148.3 million, or $6.81 per share, in the second quarter, including a gain of $77.3 million from the sale of nine aircraft. The profit compared with net income of $141.1 million, or $6.52 per share, in the year-earlier quarter, which included a $5 million gain from aircraft sales.

Sales during the quarter rose to $2.74 billion from $2.52 billion.

Operating income fell to $178.5 million from $221.6 million in the second quarter of 1989, while operating expenses rose to $2.57 billion from $2.29 billion, UAL said.

UAL has accepted a $4.38 billion buyout offer from its employees, who have until Aug. 9 to obtain financing for the acquisition.

Stephen Wolf, UAL’s chairman, said the latest results showed that United ″is very much on target in executing the strategic plan we formulated two years ago.″

For the first six months of 1990, UAL had net income of $111.9 million, or $5.14 per share, on sales of $5.26 billion. That compared with net income of $206.5 million, or $9.55 per share, on sales of $4.84 billion in the first half of 1989. Delta

The Atlanta-based airline said its net income for the three months ended June 30 fell to $74.1 million, or $1.47 a share, from $190.8 million, or $3.87 a share, a year earlier. Revenue fell to $2.24 billion from $2.31 billion.

Thomas J. Roeck Jr., Delta’s chief financial officer, said results were depressed by fare competition that produced widespread rate-cutting and rising fuel prices.

Delta also suffered from a comparison with a year-earlier results that were inflated because of the devastating strike against competitor Eastern Airlines, Roeck said in a news release.

For its full fiscal year, Delta saw its profit drop 34.3 percent to $302.8 million, or $5.79 per share, from $460.9 million, or $9.37 per share. Operating revenue rose to $8.58 billion from $8.01 billion the previous year. Midway

Chicago-based Midway’s financial performance continued to reflect the high costs of the airline’s expansion into Philadelphia, where Midway has opened a second hub.

Midway had a net loss of $11.4 million, or $1.24 a share, in its second quarter compared with net income of $5.1 million, or 45 cents per share, for the same period a year earlier.

Sales rose to $170.6 million in the quarter from $126.5 million.

Alfred Altschul, Midway’s vice president of finance and chief financial officer, said the results represented a ″significant improvement″ over the first quarter, when Midway posted a $23 million loss.

″We are making excellent progress in the development of our new Philadelphia hub and we are encouraged by strong growth trends in our traffic and advanced bookings of the months of July and August,″ said Alfred Altschul, Midway’s vice president of finance and chief financial officer.

For the first six months of 1990, Midway lost $34.4 million, or $3.63 per share, on sales of $327.7 million. That compared with net income of $8 million, or 72 cents per share, on sales of $243.7 million in the first six months of 1989.

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