SOURCE: Five Star Equities

Five Star Equities

January 25, 2013 08:20 ET

Despite Posting Mixed Fourth Quarter Earnings U.S. Airlines Showing Investors Strong Gains in 2013

Five Star Equities Provides Stock Research on Southwest Airlines and United Continental Holdings

NEW YORK, NY--(Marketwire - Jan 25, 2013) - Despite posting mixed fourth quarter earnings, U.S. airline stocks have surged in 2013. The Guggenheim Airline ETF (FAA), which tracks the performance of the NYSE ARCA Global Airline Index, has posted a gain of nearly 12 percent year-to-date compared to Dow Jones' gain of 5.5 percent over the same period. Five Star Equities examines the outlook for companies in the Airlines Industry and provides equity research on Southwest Airlines Co. (NYSE: LUV) and United Continental Holdings Inc. (NYSE: UAL).

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The International Air Transport Association (IATA) recently revised their industry financial outlook. The IATA now predicts the global airline industry to post a profit of $6.7 billion in 2012, up from their previous forecast of $4.1 billion, and in 2013 profits are expected to continue to rise to $8.4 billion. North American carriers are expected to end 2012 with a collective net profit of $2.4 billion.

"With GDP growth close to the 'stall speed' of 2.0% and oil at $109.5/barrel we expected much weaker performance. But airlines have adjusted to this difficult environment through improving efficiency and restructuring. That is protecting cash flows against weak economic growth and high fuel prices," said Tony Tyler, IATA's Director General and CEO.

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Gary C. Kelly, Southwest Airlines' Chairman of the Board, President, and CEO, stated, "2012 was a year of tremendous progress. Our profits (excluding special items) of $417 million grew 26 percent as compared to 2011 and represented our 40th consecutive year of profitability. Without a doubt, this is a remarkable feat and a record unmatched in the airline industry." Shares of the company have gained nearly 12 percent year-to-date.

United Airlines and United Express operate an average of 5,557 flights a day to 378 airports on six continents from the company's 10 airline hubs. For the full-year 2012, the company reported a net income, excluding $1.3 billion of special charges, of $589 million. Shares of United Continental Holdings have gained nearly 10 percent year-to-date.

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