October 20, 2010 - 11:00 pm
Summer travel helps boost profits for three big fliers
Airlines can’t control the economy, but by limiting the number of seats for sale they are pushing up fares and earning their biggest profits in three years.
Delta, US Airways and the parent of American Airlines all posted higher-than-expected earnings for the peak summer travel season. They were helped by rapid growth in international traffic and a budding recovery in corporate travel. Delta and US Airways gave upbeat outlooks for the upcoming holidays.
Delta said Wednesday it earned $363 million, or 43 cents per share, in the third quarter. Not counting one-time costs, many tied to debt reduction, it would have earned $1.10 per share, well above the 94 cents per share that analysts had forecast.
American parent AMR, based in Dallas, said it earned $143 million, or 39 cents per share, topping analysts’ predictions of 32 cents per share.
AMR hadn’t reported a profit since the third quarter of 2008, when it sold an investment business. It hadn’t made money from its flying since 2007.
US Airways reported net income of $240 million, or $1.22 per share, beating the $1.17-per-share forecast from analysts surveyed by Thomson Reuters.
LOS GATOS, Calif.
Internet-streaming service draws customers, lifts Netflix
Netflix Inc. on Wednesday said its third-quarter net income grew as the online movie rental company continued to attract subscribers, particularly to its Internet streaming service.
The company also raised its subscriber growth forecast for the current quarter, sending shares higher in after-hours trading.
It now expects to have between 19 million and 19.7 million subscribers at the end of this year, up from its earlier forecast of 17.7 million to 18.5 million.
Netflix ended September with nearly 16.9 million subscribers, up 52 percent from the same time last year.
In the July-to-September period, Los Gatos, Calif.-based Netflix earned $38 million, or 70 cents per share. That’s up 26 percent from $30.1 million, or 52 cents per share, in the same period a year earlier. Excluding the cost of stock options, earnings were 78 cents a share.
Wall Street analysts polled by Thomson Reuters were on average expecting 71 cents, but that’s including the stock options costs.
Revenue rose 30.7 percent, to $553.2 million from $423.1 million.
Electronic Arts snaps up
‘Angry Birds’ publisher
Electronic Arts Inc. has snapped up Chillingo, the publisher behind the popular iPhone game “Angry Birds.” But the deal doesn’t include the company that created the game and owns the rights to it, Rovio Mobile.
A person close to the deal said EA paid less than $20 million in cash for Chillingo. This person requested anonymity because the figure isn’t being made public.
EA spokeswoman Holly Rockwood confirmed the purchase but would not disclose a price.