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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: Jim Spitz who wrote (28766)	6/20/2001 12:53:31 PM
From: Jim Spitz	Read Replies (1) \| Respond to of 37746

NWA joins American and United in predicting lower results Tony Kennedy Star Tribune Wednesday, June 20, 2001 Northwest Airlines will lose more money in the second quarter than previously expected, the result of a persistent industry-wide slump in business travel and higher fuel prices. Late Tuesday, Mickey Foret, Northwest's executive vice president and chief financial officer, said the carrier expects to report a second-quarter net loss of $50 million to $75 million. The quarter ends June 30. While the loss will be an improvement over the $171 million net loss in the first quarter, analysts had been projecting a smaller second-quarter swoon. According to consensus estimates of analysts surveyed by First Call, Northwest had been expected to lose about $17 million in the second quarter. Although Foret's announcement wasn't made until after 7:30 p.m., Northwest shares fell 3.2 percent in trading Tuesday. The stock closed at $24.21, down 80 cents. "Northwest Airlines, like the rest of the airline industry, continues to suffer the effects of high fuel prices and a weak U.S. economy that are negatively impacting business travel and yields," Foret said. The blow Northwest suffered in the second quarter was softened by industry-leading load factors in April and May. High load factors are recorded when the planes are full of passengers. Looking ahead, Foret said strong third-quarter leisure bookings should bring "additional improvement" in performance. But, he added, "The continued weakness in business travel and yield into the fourth quarter will create a challenging environment for the industry." The first investor warning this quarter from a major airline came Monday from American Airlines. The Fort Worth, Texas-based company said it expects to lose more than $100 million in the second quarter. American also said it expects to be unprofitable for the full year. American and Chicago-based United Airlines are the two largest U.S. airlines. On Tuesday, United Chairman and CEO James Goodwin predicted "double-digit" declines in second-quarter revenue and profits because of challenging conditions. Both United and American cited higher fuel prices and a sluggish economy as reasons for the disappointing results. At United, Goodwin also said higher labor costs are taking a toll on financial performance. Northwest made no reference to labor costs in its announcement. Northwest, the nation's fourth-largest airline, is due to announce second-quarter earnings around July 19. Last quarter at Northwest, low yields and high fuel prices led to a loss of $123 million, or $1.47 a share, excluding one-time, non-recurring items. A loss in this year's second quarter of $50 million to $75 million would compare to last year's strong second-quarter profit of $115 million. -- Tony Kennedy is at tonyk@startribune.com . © Copyright 2001 Star Tribune. All rights reserved.