1/25/2012 1:00 PM ET
(RTTNews) - Airline operator US Airways Group Inc. (LCC: News ), Wednesday reported a decline in fourth-quarter profit, as rising fuel costs offset higher demand and fares. Nevertheless, both earnings and revenues for the quarter surpassed analysts' expectations. Following the news, US Airways stock rose over 17 percent on the New York Stock Exchange.
The Arizona-based company's net income for the quarter dropped to $18 million or $0.11 per share from $28 million or $0.17 per share last year. The results included a $2 million charge related to auction rate securities arbitration and $1 million in other charges incurred at its Express subsidiary.
Net income, excluding special charges, was $21 million or $0.13 per share. On average, 14 analysts polled by Thomson Reuters expected earnings of $0.02 per share. Analysts' estimates typically exclude special items.
Total revenues for the quarter grew 8.5 percent to $3.16 billion, topping analysts estimate of $3.14 billion. Total revenue per available seat mile rose about 10 percent to 15.20 cents helped by 9.4 percent increase in passenger yields.
Strong demand and increase in passenger fares helped the airline to improve its revenues above analysts' expectations, despite a $232 million increase in fuel costs. US Airways is the only major airline operator in U.S. that doesn't hedge. Fuel hedging is a tool that airlines operators use to reduce their exposure to volatile fuel costs.
Average aircraft fuel price rose 29 percent to $3.10 per gallon from $2.41 per gallon last year.
Traffic, measured in revenue passenger miles, edged up 0.3 percent to 17.0 billion. The company cut down its capacity by 1.3 percent to 20.8 billion available seat miles, thus increasing its load factor 1.3 percentage points to 81.9 percent from last year.
Chief Executive Doug Parker "Looking forward, we are encouraged by the continued strength in demand and believe US Airways is well positioned for success in 2012 and beyond."
LCC is currently trading at $7.50, up $1.09 or 17.00%, on a volume of 16.8 million shares, above the three-month average volume of 6.7 million.
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by RTT Staff Writer
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