United Continental Holdings said Thursday it earned $28 million in the fourth quarter, falling short of Wall Street estimates.
While its quarterly profit fell short of Wall Street estimates, Chicago-based United had much higher earnings in 2014 than a year earlier, and its CEO said he expects “far better” performance this year.
The quarterly profit, equivalent to 7 cents per share, is down from $140 million in the same quarter of 2013. Without $433 million of special, one-time expenses for such items as severance and benefits costs, it would have earned $461 million in the quarter, an increase of 86 percent year-over-year, or $1.20 per share. However, that misses the average analyst estimate of $1.22 per share.
For the fourth quarter, revenue totaled $9.3 billion, a decrease of 0.2 percent year-over-year, and matching Wall Street estimates. Fourth-quarter ancillary revenue, from such sources as checked-bag fees and selling extra-legroom seats, increased 9.7 percent year-over-year to more than $22 per passenger.
Falling oil prices worldwide led to lower jet-fuel prices for United. The airline spent 14.7 percent less on fuel in the fourth quarter but only 9.5 percent less overall because of the effects of fuel hedging, which acts as insurance against rising oil prices, but loses value when oil prices fall, as they have in recent months. In the fourth quarter, United devalued its future fuel-hedging contracts by $225 million.
For all of 2014, United earned $1.97 billion, an increase of 89 percent year-over-year, excluding $834 million of special items.
“We’re starting 2015 as a better airline, and we expect to generate far better results,” CEO Jeff Smisek said in a statement.