More Monday merger fun, this time from the airline sector. Reportedly, Southwest Airlines (LUV) announced that it will purchase AirTran Airlines for roughly $1.42 billion.

This move will be funded mainly with debt, and it will help Southwest establish a larger presence in cities like Boston and New York. What's more (as the article points out), Southwest will now be in "head-to-head competition with Delta Air Lines in Delta's home base of Atlanta."

Continue reading Southwest Airlines to Purchase AirTran

Southwest Airlines to Purchase AirTran originally appeared on BloggingStocks on Mon, 27 Sep 2010 11:00:00 EST. Please see our terms for use of feeds.

Continue reading Continental Lifted by Merger's Regulatory Approval

Continental Lifted by Merger's Regulatory Approval originally appeared on BloggingStocks on Mon, 30 Aug 2010 13:00:00 EST. Please see our terms for use of feeds.

I hope your seat belt is fastened and your tray table is in its full upright position because the parent company of United Airlines -- UAL Corporation (UAUA) -- is ready for take off.

Thanks to a 27% jump in passenger revenue per available seat mile, United just posted its first quarterly profit in three years and its highest quarterly profit in 11 years. The company reported net profit of $430 million, or $1.95 per share -- well above the consensus estimate of $1.77 per share.

Business is looking particularly good in the Pacific and Latin America regions where the company saw growth rates of 52% and 63%, respectively

Continue reading United Airlines is Ready for Take Off

United Airlines is Ready for Take Off originally appeared on BloggingStocks on Tue, 20 Jul 2010 11:00:00 EST. Please see our terms for use of feeds.

Continue reading United Airlines Achieves Significant Cost Savings in Transatlantic Flight

United Airlines Achieves Significant Cost Savings in Transatlantic Flight originally appeared on BloggingStocks on Mon, 28 Jun 2010 12:10:00 EST. Please see our terms for use of feeds.

United Airlines parent UAL Corp. (UAUA) was singled out for a directionally neutral spread strategy on Wednesday, with one options trader betting on near-term volatility for the airline issue. Shortly after the opening bell, a block of 325 contracts changed hands on UAUA's June 24 call for the ask price of $1.32, indicating they were purchased. Simultaneously, a matching block of 325 June 16 puts traded at the ask price of $0.50, revealing these contracts were also bought.

Continue reading Strangle Player Bets on a Big Move for UAL Corp.

Strangle Player Bets on a Big Move for UAL Corp. originally appeared on BloggingStocks on Thu, 15 Apr 2010 12:40:00 EST. Please see our terms for use of feeds.

Continue reading Passenger Revenue Increases for Airlines, First in 14 Months

Passenger Revenue Increases for Airlines, First in 14 Months originally appeared on BloggingStocks on Wed, 24 Feb 2010 16:25:00 EST. Please see our terms for use of feeds.

The silver lining to the travel slump last year was that fewer flights made it easier for airlines to hit their deadlines. In 2009, the airline sector had its best year for on-time arrivals since 2003, largely because many routes were cut as passenger traffic fell and companies looked for ways to cut costs. According to the Department of Transportation, airlines hit a 79.5% on-time rate last year (which includes flights that were within 15 minutes of their arrival time).

Hawaiian Airlines had the best record, but it's a small regional, lacking the challenges of the major carriers. Among the big guys, Southwest's (LUV) 83% on-time rate was best, and United's (UAUA) 81% was tops for traditional air carriers. Of course, these airlines and the rest of the sector were helped along by the fact that they pad their schedule, which makes it a hell of a lot easier to show up on time.

Continue reading United Airlines Buys On-Time Success

United Airlines Buys On-Time Success originally appeared on BloggingStocks on Sun, 14 Feb 2010 10:20:00 EST. Please see our terms for use of feeds.

Monday, United Airlines (UAUA) announced that its December traffic matched last year's traffic, but that planes were more crowded. Confused? UAUA had fewer flights this year compared to a year ago, so matching traffic from last year meant that the planes had more passengers.

The air carrier announced that paying passengers flew 9.21 billion miles last month and capacity shrank to 11.24 billion available seat miles from 11.60 billion in December 2008. All this totaled up to average occupancy of 81.9%, up from 79.4% a year earlier. Average occupancy for the year increased to 81.2% from 80.4%. Taking regional operations out of the equation, average occupancy on UAUA flights came in at 83%, up from 79.9% in the prior year.

Continue reading United Airlines Sees Flat Traffic in December

United Airlines Sees Flat Traffic in December originally appeared on BloggingStocks on Tue, 05 Jan 2010 11:00:00 EST. Please see our terms for use of feeds.

For years, it's been evident that smaller airlines have had an operating advantage, particularly when they use less expensive airports. They've been able to post better numbers as a result, and in the current travel slump, they've outperformed the larger carriers. Well, they've also picked up a considerable amount of market share.

According to a report by USA Today, low cost carriers now have 30% of the market in the United States. Price-sensitive consumers are turning to cheaper alternatives, even if it means (for fliers with elite status) giving up the perks they've earned through years of customer loyalty.

Continue reading Low cost carriers own 30% of domestic airline biz, growing fast

Low cost carriers own 30% of domestic airline biz, growing fast originally appeared on BloggingStocks on Tue, 10 Nov 2009 16:15:00 EST. Please see our terms for use of feeds.

The skies are starting to look a little friendlier to United Airlines (NASDAQ: UAUA). The airline reported a quarterly loss that was lower than expected. Third quarter traffic was off only 2.9%, but because United used discounts to fill seats, revenue fell 20.3% (to $4.43 billion). The key to a recovery will be getting passengers to shell out for more expensive seats. According to United's president, John Tague, "There's no opportunity here for a full revenue recovery until we get premium cabin pricing back." He doesn't know how long this is going to take, but does say that he's seen progress over the past few months.

Nonetheless, it's important not to confuse "not so bad" with "making money." UAL lost $57 million (39 cents a share) last quarter. If it hadn't had some good news on fuel hedges and accounting issues, the loss would have been 43 cents a share. Again, this is better than analysts polled by Thomson Reuters expected: they were forecasting a loss of 94 cents per share. And, the third quarter loss was much better than last year's $792 million for the third quarter.

But, it all comes down to the bottom line, and a loss is a loss is a loss.

Continue reading UAL has almost good news for third quarter

UAL has almost good news for third quarter originally appeared on BloggingStocks on Wed, 21 Oct 2009 10:00:00 EST. Please see our terms for use of feeds.

If you think all those new airline fees were a temporary measure to help these beleaguered companies through an economic crisis, you're out of your mind. Now that they've had a taste of how much they can make by charging you for an extra bag or a little more leg room, they're hooked. More important, the fees are making up a meaningful portion of airline revenues and profits, so investors aren't likely to be satisfied with a return to normal - well, they can't. Extra fees are the new "normal."

Continue reading Extra airline fees to become the new 'normal'

Extra airline fees to become the new 'normal' originally appeared on BloggingStocks on Fri, 16 Oct 2009 15:40:00 EST. Please see our terms for use of feeds.

United Airlines (NASDAQ: UAUA), US Airways (NYSE: LCC) and American Airlines (NYSE: AMR), according to an influential analyst, have run out of options. Jamie Baker of JPMorgan said in a July 20, 2009 report that these companies couldn't do anything to prevent a cash crisis. They only savior available to them would have to be an outside investor. To call the position grim would be optimistic. Unfortunately, it couldn't have come at a worse time.

As Baker was walking the bear into the airline industry, United was starting to celebrate its change in direction. The carrier has improved its on-time rate, according to a USA Today report, and its operations are coming around. Despite the fact that the airline industry has been brutalized by the global recession, the airline has made some progress. Through August, the company's share price doubled, and its ascent has continued in September. So, the company is locked in an ongoing struggle to manage its identity, cope with its past and shape how the world sees it today.

The operational "makeover" has resulted in a reduction of its fleet from 601 jets in 2000 to 386 as of the summer of 2009. In terms of passenger traffic, it's in the #4 spot in the United States - trailing Delta (NYSE: DAL), Southwest (NYSE: LUV) and American. With Q2 revenues off 25.2% year-over-year, however, drastic measures are still necessary.

Continue reading United's battle over its identity

United's battle over its identity originally appeared on BloggingStocks on Thu, 17 Sep 2009 17:00:00 EST. Please see our terms for use of feeds.

To get an idea of how poorly United Airlines (NASDAQ: UAUA) has performed, may I suggest viewing this little nugget.

If United is breaking guitars as accused, I would fly another airline. As an avid guitar player myself, such carelessness is unacceptable. The airline industry is struggling, and poor customer service does not help. The above video is now going viral on the Internet - what a PR disaster for United.

Continue reading Stock to avoid #7 -- United Airlines (UAUA)

Stock to avoid #7 -- United Airlines (UAUA) originally appeared on BloggingStocks on Sun, 19 Jul 2009 10:00:00 EST. Please see our terms for use of feeds.

With such uncertainty, following an absolute return strategy continues to offer investors the biggest bang for their buck. There is no sense in guessing where the market will be down the road.

Instead, buy cheap stocks and sell stocks that are expensive. Then blend the two approaches together in one portfolio and chances are you'll make money.

Even with a huge rally in stocks, the S&P 500 ended the second quarter with a year-to-date gain of 1.78%. That is a vast improvement compared to the 11% loss at the end of the first quarter, but it's a minimal return for taking risk in the stock market.

Investors need to do better -- and they can.

Continue reading Take a pass on these ten stocks

Take a pass on these ten stocks originally appeared on BloggingStocks on Sat, 18 Jul 2009 08:00:00 EST. Please see our terms for use of feeds.

Continental Airlines (NYSE: CAL) just got the relief it needs to compete. Despite resistance from the Department of Justice (which can only recommend), the Department of Transportation has granted the airline immunity from antitrust laws. This clears the way for Continental to work with United Airlines (NASDAQ: UAUA) -- and other carriers -- on international routes. Now, the airline can join Star Alliance, which already has antitrust immunity.

At the same time, DOT approved a joint venture among Continental, United, Lufthansa (OTC: DLAKY) and Air Canada. This new relationship would involve trans-Atlantic routes.

Continue reading DOT overrides Justice, Continental Airlines wins antitrust relief

DOT overrides Justice, Continental Airlines wins antitrust relief originally appeared on BloggingStocks on Mon, 13 Jul 2009 14:20:00 EST. Please see our terms for use of feeds.

A consequence of a weakening airline sector is the pain it will cause plane-maker Boeing (NYSE: BA). With capacity tightening, the need for aircrafts is diminishing.

Imagine planes just sitting idle in the desert. That vision is becoming a reality.

Fortunately for investors, that vision will take time to play out. In the meantime, Boeing gets a free pass as they work through years of order backlog that built up during the last business cycle.

If you take a look at Boeing during the last few months, it is clear that investors have yet to catch on to a world of lower revenues going forward.

Continue reading Boeing: Another airline loser

Boeing: Another airline loser originally appeared on BloggingStocks on Thu, 29 Jan 2009 13:00:00 EST. Please see our terms for use of feeds.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Advanced Micro Devices Inc. (NYSE: AMD) reported dismal Q4 results due to lower demand.
• AMR Corp. (NYSE: AMR) reported a bigger-than-expected Q4 loss, sending shares lower.
• Check Point Software Technologies Ltd. (NASDAQ: CHKP) earnings prospects led to an upgrade.
• eBay Inc. (NASDAQ: EBAY) posted Q4 and full-year results with increased revenue due to a stronger dollar.
• Google Inc. (NASDAQ: GOOG) reported strong Q4 numbers that beat analysts' expectations.
• International Business Machines Corp. (NYSE: IBM) reported better-than-expected Q4 and 2008 earnings.
• Lockheed Martin Corp. (NYSE: LMT) posted strong Q4 results but lowered its 2009 guidance.
• Northern Trust Corp. (NASDAQ: NTRS) shares surged after posting better-than-expected earnings.
• Regions Financial Corp. (NYSE: RF) reported a huge loss due to write-downs and offered a bleak outlook.
• Societe Generale said that it expects to have broken even in the final quarter of 2008.
• Southwest Airlines Co. (NYSE: LUV) posted its second straight quarterly loss due to fuel hedging costs.
• UAL Corp. (NASDAQ: UAUA) reported a huge loss on the erosion in value of oil hedges as prices dropped.
• Usana Health Sciences Inc. (NASDAQ: USNA) posted record Q4 results despite one-time charges.

For more highlights from this week, see Apple, Microsoft, GE, Johnson & Johnson, Harley Davidson and others

Continue reading Earnings highlights: eBay, Google, IBM, Southwest, UAL, AMR, Northern Trust and others

Earnings highlights: eBay, Google, IBM, Southwest, UAL, AMR, Northern Trust and others originally appeared on BloggingStocks on Sat, 24 Jan 2009 14:40:00 EST. Please see our terms for use of feeds.

As an investor, I really despise the airline sector at the moment. These companies are notorious for being poorly run cash-losing machines.

Now, in the midst of a deep recession and too many airplanes flying too few customers, airline stocks can be expected to be poor performers in the short run and maybe longer.

I made the sector part of my Top 10 Stocks to Avoid in 2009. The main thesis, aside from the obvious recessionary issues, was that oil prices would resume their climb at some point in 2009.

Specifically, I suggested investors avoid Delta Airlines (NYSE: DAL) and United Airlines (NASDAQ: UAUA).

Higher oil prices directly impact the bottom line of the air carriers. The higher oil goes, the more difficult it is for the airlines to make a profit. This summer, with oil prices hitting $150 per barrel, the future of the group was in peril.

That said, the reality of higher prices caused the group to make some necessary changes that included mergers, reduced capacity and important surcharges. The operating environment had the potential to bring much needed discipline to the carriers.

Unfortunately, higher fuel prices did not last long enough to bring enduring change to the group. As prices fell, airline stocks rallied. It was looking good until the economy tanked.

With the recession, oil prices suddenly mattered less. Instead, the focus was on the consumer and business traveler cutting expenses during a contraction.

The airline sector loses if the economy rallies, as such a state brings higher oil prices and lower profit. If the economy stalls, the sector loses customers and revenues fall to unsustainable levels.

The point is that it is no-win situation for the group.

Continue reading Stay far, far away from airline stocks

Stay far, far away from airline stocks originally appeared on BloggingStocks on Thu, 22 Jan 2009 09:15:00 EST. Please see our terms for use of feeds.

I think it's fair to say that there's much trepidation about the earnings season that picks up steam this week. And for better or worse, numbers from the big financials have begun to roll in. Last week we saw profit sink for JPMorgan Chase (NYSE: JPM) and significant losses from Bank of American Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), and Deutsche Bank (NYSE: DB).

Analysts surveyed by Thomson Reuters expect Bank of New York Mellon Corp. (NYSE: BK) to be among those financials reporting fourth-quarter earnings growth this week. They anticipate that Bank of New York will post a profit of $0.70 per share, compared to $0.67 per share a year ago and $0.72 in the previous quarter. Revenue is expected come to $3.8 billion, about the same as it was a year ago. Bank of New York has fallen short of earnings estimates in two of the past five quarters, by as much as 11.1%. For the full year, analysts are looking for $2.78 per share (+5.8%) on $14.8 billion (+4.2%). The consensus recommendation of analysts is to buy BK, and the long-term EPS growth rate forecast is 10.7%. Shares are 48.7% lower than a year ago. Other financials expected to report quarterly earnings growth this week include SunTrust Banks Inc. (NYSE: STI) and M&T Bank Corp. (NYSE: MTB).

Continue reading The week in preview: Financials, techs lead off earnings crunch

The week in preview: Financials, techs lead off earnings crunch originally appeared on BloggingStocks on Sun, 18 Jan 2009 12:30:00 EST. Please see our terms for use of feeds.

Wall Street's optimism in last week's preview about the earnings of tech stocks wasn't misplaced, as there were many more positive surprises than negative ones among the stocks we looked at. This week will bring plenty more data for investors in and watchers of the sector to mull over. Apple Inc. (NASDAQ: AAPL), AT&T Inc. (NYSE: T), and Microsoft Corp. (NASDAQ: MSFT), for example, are expected by analysts surveyed by Thomson Financial to post modest earnings gains from a year ago, to $1.11 per share (on $8.1 billion in sales), $0.72 per share (on $31.3 billion in sales), and $0.47 per share (on $14.8 billion in sales) respectively. All three of these companies ended the week closer to their 52-week lows than highs, and analysts on average consider them each a buy.

Here's a look at some of the week's biggest expected earnings gainers and decliners in the sector:

• Baidu.com Inc. (NASDAQ: BIDU): $1.25 per share (+44.0%) on revenues of $134.7 million (+103.2%)
• Broadcom Corp. (NASDAQ: BRCM): $0.44 per share (+38.6%) on revenues of $1.3 billion (+33.8%)
• QLogic Corp. (NASDAQ: QLGC): $0.31 per share (+29.0%) on revenues of $170.0 million (+21.2%)
• FLIR Systems Inc. (NASDAQ: FLIR): $0.32 per share (+28.1%) on revenues of $275.2 million (+44.0%)
• Juniper Networks Inc. (NASDAQ: JNPR): $0.30 per share (+26.7%) on revenues of $927.4 million (+26.2%)
• Waters Corp. (NYSE: WAT): $0.75 per share (+17.3%) on revenues of $391.6 million (+11.1%)
• Flextronics International Ltd. (NASDAQ: FLEX): $0.29 per share (+17.2%) on revenues of $8.7 billion (+57.3%)
• EMC Corp. (NYSE: EMC): $0.19 per share (+10.5%) on revenues of $3.7 billion (+12.9%)

Continue reading The week in preview: More hope for techs, doubt about financials

The week in preview: More hope for techs, doubt about financials originally appeared on BloggingStocks on Sun, 19 Oct 2008 12:30:00 EST. Please see our terms for use of feeds.