Friday, Oct. 18, 2002 | 10:56 a.m.
SUN STAFF AND WIRE REPORTS
The parent company of ailing United Airlines reported an $889 million third-quarter loss today, its second-biggest quarterly deficit ever, reflecting the continued bleak environment for U.S. carriers.
It was the ninth consecutive quarterly loss for UAL Corp., which is negotiating with its unions to shed billions of dollars in costs in a bid to avoid filing for bankruptcy.
The only worse quarterly result was the $1.16 billion loss in last year's third quarter, when the terrorist attacks threw the airline industry into a tailspin from which it has yet to recover.
Disclosing its first significant details on weeks-old concession talks, United said the company and a coalition of union leaders have set a target of $5.8 billion in labor cost savings over 5 1/2 years -- a middle ground between what management had sought and unions had publicly agreed to provide.
The latest net loss amounted to $15.57 per share, compared with the record $21.43 a share loss a year earlier.
UAL shares fell 24 cents, or 13.9 percent, to $1.49 in morning trading on the New York Stock Exchange -- below their four-decade closing low of $1.51.
Operating revenues sank 9 percent to $3.7 billion from $4.1 billion a year ago.
United said a tentative recovery in the beginning of 2002 has stalled due to less business travel, the increasing use by business travelers of leisure fares, increased awareness of discount fares because of the Internet and excess industry capacity that makes leisure fares "too low."
Continental
Continental Airlines on Thursday reported that it lost $37 million in the third quarter, or 58 cents per share, less than industry analysts expected.
Continental Chairman and Chief Executive Officer Gordon Bethune noted that the carrier finished well ahead of most rivals.
"Winning is defined as outperforming your competition, and we clearly have," he said. "Continental Airlines has led all major hub and spoke airlines in every respect."
Continental investors were warned not to expect a big rebound anytime soon. The fourth quarter is shaping up as difficult for almost all the airlines, as is the next year, Bethune said.
Continental said it would have made money if it weren't for "burdensome" security costs, taxes and other government restrictions. Those factors reduced operating income by $65 million in the quarter, the airline said.
Revenue for the quarter fell to $2.18 billion from $2.22 billion a year earlier.
Sprint
Sprint Corp., the main local phone company in Las Vegas and the third-biggest U.S. long-distance telephone company, had a third-quarter profit as sales for its local, long-distance and mobile-phone businesses increased 3.2 percent.
Net income was $519 million, compared with a net loss of $134 million in the year-earlier quarter, the Kansas City, Mo.-area company said in a statement. Sales rose to $6.79 billion from $6.57 billion. The figures combine results from Sprint's regular phone and wireless businesses, which trade separately.
Long-distance sales fell for the seventh straight quarter as demand and calling prices slump. Chief Executive William Esrey is also trying to reduce more than $19 billion of debt and revive subscriber growth at the PCS wireless business. The unit said last month it's losing customers at a faster rate than it adds them, partly because it's disconnecting customers who don't pay bills.
Microsoft
Microsoft reported a remarkably strong quarterly performance Thursday with both profits and revenue up sharply at a time when the economy is weak and technology spending is depressed.
The software maker's revenue grew 26 percent in the quarter, to $7.75 billion. Its operating profits increased 40 percent, to $4 billion.
Microsoft's net income more than doubled to $2.7 billion, or 50 cents a share. But the jump in net income was magnified because the earlier quarter included a charge of $980 million to write off strategic investments in telecommunications and cable companies whose share prices had plummeted in 2001.
Both Microsoft's revenue and earnings results easily surpassed the estimates of Wall Street analysts. The Wall Street estimate of profits was 43 cents a share, and the revenue estimate was $7.13 billion.
Microsoft did get an unusual increase in revenue in the quarter, largely from corporate customers rushing to sign up for a new licensing program before a July deadline.
But the company's performance also showed that it is succeeding in its strategy to persuade personal computer makers and end users to buy the larger and more costly business version of its Windows operating system, and to move increasingly into the lucrative market for corporate computing.
EBay
EBay, the Internet auction giant, announced continuing growth Thursday, with nearly $264 billion in net revenue from transactions in the third quarter -- 73 percent higher than the same period a year ago.
The chief executive said that eBay might have gotten a helping hand from the same economic troubles that have made a boneyard of the dot-com marketplace.
EBay remains a "compelling place to do business," said Margaret C. Whitman, the president and chief executive, "despite the current climate, or because of it."
The company, based in San Jose, Calif., helped the online world buy and sell $3.77 billion worth of everything from collectibles to cars during the quarter that ended on Sept. 30.
EBay said its net income had reached $61 million, or 21 cents a diluted share, for the quarter. The year before, income was $18.8 million for the quarter. Whitman called it "an outstanding quarter for eBay."
Nevada State Bank
Zions Bancorporation of Salt Lake City, owner of Nevada State Bank, reported third-quarter net income of $39.4 million, or 43 cents per share. The results included several nonrecurring items because of a restructuring efforts, asset impairments and venture capital investment write-downs.
The results were down 45 percent from the year-ago quarter.
Operating cash earnings for the third quarter were $76.2 million or 83 cents per share, a decrease of 12.8 percent and 10.8 percent, respectively, from the year-ago quarter.
For the third quarter of 2002 the provision for loan losses was $22.3 million compared to $15.7 million provided during the second quarter of 2002 and $21.5 million provided during the third quarter of 2001.
Hershey
Hershey Foods Corp. said Thursday that third-quarter earnings rose 1.9 percent, but were hurt by expenses related to an aborted exploration of the sale of the company.
The nation's largest candymaker posted profits of $123 million, or 89 cents per share, for the quarter ended Sept. 29, compared with $120.7 million, or 88 cents per share, during the same period last year.
Excluding one-time items, third-quarter earnings were $139.8 million, or $1.01 per share, compared with $123.3 million, or 90 cents per share, for the same quarter last year.
Analysts for Thomson First Call had forecast 99 cents per share.
The candymaker's consolidated net sales for the quarter totaled $1.15 billion, compared to $1.18 billion for the same period last year.
Shares of Hershey fell $2.15, or 3.4 percent, in trading Thursday to close at $62.10 each on the New York Stock Exchange.
Hershey, which makes products such as Hershey chocolate bars, Hershey's Kisses and Reese's peanut butter cups, incurred one-time expenses of $17.3 million related to the potential sale of the company and $9.1 million associated with a realignment of the company announced last October.
The Hershey Trust Co. announced in July that it had ordered Hershey Foods executives to seek bids on its controlling stake in the candymaker so the trust could diversify its holdings and protect its assets. The trust's $5.4 billion fund finances the 93-year-old Milton Hershey School for disadvantaged children.
The announcement sparked community opposition out of fear that a new company would impose massive layoffs and possibly close area plants. But the trust decided in September not to sell the company, saying neither of the two bids it received was satisfactory.
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