Earnings Preview: US Airways profit gain seen

As it awaits trial over American merger, US Airways expected to report increase in 3Q profit

Associated Press

TEMPE, Ariz. (AP) -- US Airways Group Inc. is expected to report Wednesday that profit excluding one-time items rose in the third quarter, helped by rising passenger traffic and flat to declining competition on routes it flies.

WHAT TO WATCH FOR: It's unclear whether US Airways executives will say much about whether the airline and American expect to settle the federal government's lawsuit that's holding up their merger. They've been tightlipped as they prepare for a Nov. 25 trial.

Stable jet fuel prices and traffic are helping airlines make money, but some analysts are worried that US Airways might be planning to grow too quickly. The carrier expects to increase fourth-quarter passenger-carrying capacity by 5.5 percent over the same period last year. That has raised concerns that US Airways would need to drop its average prices, leading to lower profit margins.

WHY IT MATTERS: If it can't settle or win the antitrust lawsuit, US Airways will remain independent, so it needs to demonstrate that it can remain successful while flying solo. The Tempe, Ariz.-based company is the nation's fifth-biggest airline.

WHAT'S EXPECTED: Analysts surveyed by FactSet expect US Airways to post a profit of $1.12 per share, excluding special items. The analysts forecast revenue of $3.84 billion.

LAST YEAR'S QUARTER: A year ago, the Tempe-based airline reported net income of $245 million, or $1.24 per share. Adjusted profit was 98 cents per share, while revenue came to $3.53 billion.

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