First Union, the No. 6 U.S. bank holding company, said today its third-quarter profits rose 6 percent, topping estimates, as it turns around its operations after prior unwieldy acquisitions.
The Charlotte, N.C.-based bank, which has about $260 billion in assets and more than 2,200 branches, earned $852 million, or 86 cents a diluted share in the quarter, compared with $802 million, or 84 cents a share, a year ago. Excluding gains and restructuring charges, the company earned $702 million, or 71 cents a share, in the quarter.
Wall Street had expected the bank to earn 69 cents a share in the quarter, according to First Call/Thomson Financial, which tracks analysts’ consensus earnings forecasts.
First Union is in the midst of a $3 billion restructuring plan, announced at the end of June, to revive revenue growth after troubles integrating a string of acquisitions. Its stock has tumbled about 40 percent from its 52-week high of $44-5/16 hit last November.
Many U.S. regional banks face slower revenue growth after a series of interest rate increases that have put pressure on lending profits. Higher rates make it more costly for banks to borrow to fund loans and sometimes make borrowers default.
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UAL Posts $64 Million Loss
UAL, parent of United Airlines, the world’s largest airline, said today it lost a greater-than-expected $64 million in the third quarter, before one-time items, as flight cancellations, delays and higher costs for jet fuel and wages hurt results.
Chicago-based UAL said the $64 million loss amounted to $1.29 a share, compared with a profit of $359 million, or $2.89 a share, a year earlier. The last time the company lost money was in 1993.
Analysts on average had forecast a loss of 54 cents, according to First Call/Thomson Financial, with estimates ranging from a loss of $1.15 to a loss of 20 cents.
Including a loss on warrants the company owns in Priceline.com, a charge for planned early retirement of four leased aircraft and a loss associated with the early retirement of debt, UAL lost $116 million, or $2.30 a share.
Revenues rose 1.2 percent to $4.91 billion from $4.85 billion a year earlier.
UAL, which has agreed to acquire US Airways Group Inc. for $4.3 billion, had warned twice during the third quarter that its results would fall short of analysts’ earnings forecasts for the second half of the year. Prior to the last warning in September, analysts had expected the company to earn 97 cents a share for the quarter.
UAL said reduced capacity levels to address operational problems will continue to hurt its fourth-quarter performance. Additional costs from its new pilot contract, expected to be ratified this month, and from other labor contracts being negotiated and higher fuel prices, will likely cause it to lose money in the fourth quarter, the company said. BACK TO TOP
E*Trade Profitable in Q4
E*Trade, the No. 2 U.S. Internet broker, posted today a quarterly profit compared to a loss in the year-ago period as it sold investment assets and kept a lid on advertising spending.
The Menlo Park, Calif.-based company, which has 3.3 million customers, reported a net profit of $47.7 million, or 15 cents per share, for the fiscal fourth quarter ended Sept 30. That compared with a net loss of $28.0 million, or a loss of 10 cents per share, in the same period last year. Net revenue rose 76 percent to $340 million.