UAL’s 3rd-Quarter Profit Falls 76% to $25 Million

UAL Corp., parent of United Airlines, said Thursday that its third-quarter net income fell more than 76% because of the sluggish economy and cut-rate ticket prices.

Chairman Stephen M. Wolf called the results “disappointing” and said United and other carriers will continue to perform poorly until the economy improves or steep discounts on fares are eliminated.

UAL’s net income of $25 million, or $1.05 per share, was worse than the $1.70 to $2.70 per share that analysts expected, prompting a strong negative reaction on Wall Street. UAL’s stock fell $2 per share to $132.75.

The earnings for the three months ended Sept. 30 compared to net income of $106.1 million, or $4.87 per share, in the same period last year.

Revenue rose nearly 9% to $3.23 billion from $2.97 billion.

Wolf acknowledged that the results were “especially disappointing in that the third quarter is traditionally the strongest operating period for United and for the U.S. airline industry in general.”

In addition to the sluggish economy and industrywide fare wars, Wolf indicated that United suffered more than other airlines from trying to match the sharp discounts that Midway Airlines offered as it tried to work its way out of bankruptcy. Chicago is the main hub for both airlines.

Northwest Airlines is buying Midway in a deal approved in U.S. Bankruptcy Court earlier this month.

Data General Corp.: Data General, which shifted its strategy a few years ago after falling on hard times, reported quarterly earnings of $18.4 million as it ended its first profitable year since 1985.

“I think Data General has come a long way in a short time,” said Ronald L. Skates, president of the Westboro, Mass.-based computer maker.

Earnings for the fourth quarter ended Sept. 28 equaled 53 cents per share and contrasted with a loss of $89.3 million, or $2.93 per share, in the same quarter last year.

Analysts noted that the profit stemmed largely from cost controls rather than increased revenue. Sales of $295.6 million were down 4% from $308.5 million.

For the fiscal year, Data General earned $85.6 million, or $2.62 per share, contrasted with a loss last year of $139.8 million, or $4.65 per share.

Sales for the year totaled $1.22 billion, down 1% from $1.21 billion the previous fiscal year.

Transamerica Corp.: Transamerica reported a 19% decline in third-quarter earnings, citing continuing losses at its commercial finance subsidiary.

San Francisco-based Transamerica said net income for the third quarter totaled $65.3 million, or 82 cents a share, down from $80.8 million, or $1.01 a share, a year earlier.

Revenue amounted to $1.72 billion, up 5% from $1.64 billion a year ago.

The company said its life insurance and consumer lending operations set earnings records during the quarter, and its property-casualty and leasing operations also posted earnings gains. But losses at its commercial finance unit led to an overall earnings decline.