Earnings briefs for July 19, 2002

Friday, July 19, 2002 | 9:53 a.m.

Second-quarter loss widens on lower fares, demand

ARLINGTON, VA. -- US Airways Group Inc.'s second-quarter loss widened to $248 million as the carrier tries to avoid bankruptcy amid declining air travel and fares.

The loss of $3.64 a share widened from $24 million, or 36 cents, in the year-earlier period, the seventh-largest U.S. airline said in a statement. Sales fell 24 percent to $1.9 billion from $2.49 billion.

The Arlington, Va.-based airline's revenue dropped in part because travelers avoided shorter East Coast flights, opting for trains or cars, and sought discount fares or flights on low-fare rivals.

US Airways was forecast to have a loss of $3.48 a share, the average estimate of analysts surveyed by Thomson First Call.

Results beat expectations

SEATTLE -- Buoyed by strong revenue across a range of its businesses, Microsoft on Thursday reported fourth-quarter financial results that slightly exceeded analysts' expectations.

The company said despite contracting personal and corporate computing markets, it had continued to find strength in the sales of the new XP version of its Windows operating system, growth of its Office desktop software business and improved performance of a number of its consumer lines, including its MSN online service.

"We're finally really seeing the fruits of the long-term R&D investments Microsoft has been making in its Windows operating system," said John G. Connors, chief financial officer of Microsoft. He also said the company had paid greater attention than in the past to controlling its expenses.

The largest disappointment for the software publisher was sales of Microsoft's Xbox gaming system, which the company said had sold 3.9 million units by the end of the quarter. Microsoft had originally projected sales as high as 6.5 million for the year.

Microsoft said it earned $1.53 billion, or 28 cents a share, in its fiscal fourth quarter ending on June 30, up from $65 million, and sales climbed 10 percent to $7.25 billion.

Microsoft earned 43 cents a share. The earnings included an after-tax charge for investment impairments in telecommunications and cable industry investments of $806 million, or 15 cents a share. Analysts had been expecting Microsoft to report earnings of 42 cents a share, on sales of $7.1 billion, according to a consensus of 24 analysts polled by Thomson First Call.

Second quarter loss at $351 million

CHICAGO -- United Airlines' parent company today reported a $341 million second-quarter loss and warned it will suffer for the remainder of the year.

It was the eighth straight quarter of losses for UAL Corp.

"We've posted another sizable loss in what traditionally is a strong quarter for United and the entire industry," said Jack Creighton, chairman and chief executive officer. "We expect to post a significant deficit for the year."

The nation's No. 2 carrier lost $6.08 a share in the second quarter, compared to $6.87, or $365 million, for the same period last year. Analysts surveyed by Thomson First Call had estimated the company would lose $7.13 per share.

Profit reported for fourth quarter

SAN JOSE, Calif. -- Sun Microsystems Inc. posted fourth-quarter earnings of $20 million Thursday, returning to profitability even as it continued to struggle with the lingering economic downturn.

For the period ended June 30, Sun earned $20 million, or 1 cent a share, compared with a loss of $88 million, or 3 cents a share, in the same period a year ago. Analysts were expecting a profit of 1 cent a share on sales of $3.3 billion, according to a survey by Thomson First Call.

Excluding a loss on equity investments and one-time credits, the company earned $28 million in the fourth quarter, or a penny per share. The adjustments were not significant enough to change the per-share earnings.

Revenues were $3.4 billion, down 16.8 percent from $4 billion reported a year ago.

Second quarter loss narrows on new fare system

PHOENIX -- America West Holdings Corp. said its second-quarter loss narrowed to $8.5 million, better than analysts expected, as a new ticket-pricing system for America West Airlines helped attract passengers.

The loss was 25 cents a share, compared with a loss of $42.5 million, or $1.26 a share, in the year-earlier quarter, the company said in a statement. Sales fell 7.3 percent to $544.1 million from $587.2 million. America West was forecast to lose 58 cents, the average estimate of analysts in a Thomson First Call survey.

The eighth-largest U.S. airline in March ended a required Saturday-night stay to make business travel cheaper and lure more last-minute leisure passengers. The carrier, which received a U.S. government loan guarantee after the Sept. 11 attacks cut demand, stopped offering deeply reduced fares and added one-way trips to raise the average ticket price.

"Consumer support for our new, flexible fare structure has been overwhelming and exceeds our expectations," Chief Executive Officer Douglas Parker said in the statement. "Indeed, if not for aggressive retaliatory pricing by some of our high-cost competitors, America West would have been profitable in the second quarter."

Parker said he expects Phoenix-based America West to be among the first major U.S. airlines to report a profit, after billions in combined losses as the Sept. 11 terrorist attacks deepened a slump in business travel during the recession. Average fares for the industry are at 15-year lows as carriers cut ticket prices to win back travelers.