Profits soar for Northwest
Usually, companies “emerge” from bankruptcy, but for Northwest Airlines it was more like a sprint.
In its first full quarter after leaving Chapter 11 this summer, Northwest Airlines Corp. reported a $244 million profit on Monday, much higher than analysts expected. The nation’s fifth-largest airline flew a smaller but fuller fleet this year, and the results showed up on the bottom line.
Other airlines reported similar results earlier this month, with Delta and United airlines beating analyst expectations as well.
Fuel prices will have a big impact on whether those profits continue. Oil touched a new trading high of $93 a barrel early Monday, and even when adjusted for inflation it’s not far from the highs of the early 1980s.
In the past, Northwest has been able to pass along about half of the cost of fuel price increases to passengers, Chief Financial Officer Dave Davis said.
As fuel prices rise, Northwest and other airlines have generally been willing to reduce flights and raise prices rather than fly unprofitably. Northwest is in a good position in that area because of its 103 DC-9’s, which are paid for, so they can be parked with little damage to profits.
Verizon Communications Inc. on Monday reported third-quarter earnings that were largely in line with expectations, reflecting steady growth in its wireless operations and a slow decline in its wired telephone business.
The nation’s second largest telecommunications company earned $1.27 billion, or 44 cents per share, in the July-September period, down 34 percent from $1.92 billion, or 66 cents per share, a year earlier.
Revenue came to $23.8 billion in the latest quarter, up 5.8 percent from $22.5 billion a year ago.
Excluding one-time charges, earnings would have been 63 cents per share. That compares with 53 cents per share in the same period last year, excluding the high-margin Yellow Pages business and other operations that have since been sold off.
Mountain West Bank of Coeur d’Alene announced record earnings for the nine-month period ending Sept. 30, the company said in a news release.
Earnings through September were $10.6 million, up 12.8 percent from the same time period in 2006. Total assets were $1 billion, an increase of about 12.6 percent since September 2006.
For the quarter that ended Sept. 30, earnings were $3.69 million, compared to $3.2 million for the same time period in 2006, an increase of 14.4 percent.
Mountain West Bank is a state-chartered commercial bank that has 23 branches operating in Idaho, Washington and Utah. Its parent company, Glacier Bancorp, is a publicly traded $4.6 billion holding company based in Kalispell, Mont.
Kellogg Co. reported a 9 percent increase in third-quarter earnings Monday, but its profit forecast for 2008 was lower than Wall Street’s prediction.
It said rising prices for the ingredients that go into its flagship Corn Flakes, Keebler cookies, Pop-Tarts pastries and Eggo waffles were limiting profit growth.
Pablo Zuanic, a securities analyst with JP Morgan, wrote that Kellogg’s shares were also being hurt by overall sales growth that was below expectations.
Its shares fell $1.33, or 2.4 percent, to close at $53.11 Monday.
The world’s leading cereal producer earned $305 million, or 76 cents per share, in the July-September period, up from $281 million, or 70 cents per share, a year earlier.
Sales rose 6 percent to $3.1 billion from $2.8 billion a year ago.