By Tracy Rucinski
CHICAGO (Reuters) - United Airlines on Tuesday reported a fourth-quarter profit that easily beat Wall Street forecasts, sending shares higher, as the No. 3 U.S. carrier scheduled more flights out of its hubs and won back customers after a series of public relations disasters.
Shares of United Continental Holdings Inc (O:UAL) jumped 6 percent to $86.11 in extended trading, lifting the airline sector and investor confidence after the carrier reported a 5 percent rise in revenue per mile flown, a closely watched industry measurement.
That growth was at the top end of United's forecast and outpaced growth reported by rival Delta Air Lines (N:DAL) earlier on Tuesday.
Airline shares had fallen this month after both Delta and American Airlines Group Inc (O:AAL) lowered estimates for fourth-quarter unit revenue, raising concerns about the industry's ability to raise fares in an uncertain global economy.
Chicago-based United attributed its revenue growth to a strategy launched last January to expand its domestic network by adding flights and more options for connections through its seven main hubs, with a particular focus on Chicago, Denver and Houston.
Adjusted earnings per share rose to $2.41 from $1.99 a year earlier, topping analysts' average forecast by 37 cents, according to IBES data from Refinitiv.
For 2019, United said it expects adjusted earnings of $10.00 to $12.00 per share.
United posted fourth-quarter net income of $462 million, or $1.70 per share, compared with a profit of $579 million, or $1.98 per share, a year ago.
The airline said it planned to boost its flight network by another 4 percent to 6 percent next year, and said it had placed orders for four Boeing (NYSE:BA) 777-300ER aircraft and 24 737 MAX planes.
However, the ability of airlines to introduce new aircraft into their fleets is being hampered by a partial U.S. government shutdown, which is delaying federal certification for new airplanes to fly commercially.
Delta on Tuesday warned of a decline in revenue growth per available seat mile in the current quarter in part due to business lost to the shutdown.
United said it expected first-quarter unit revenue growth to be between flat and up 3 percent. It did not comment on the impact of the shutdown.
In addition to capacity adds, United reinforced customer service over the past year in an effort to rebuild an image scarred by incidents of passenger abuse and dead pets.