US Airways 1Q Profit Up 2 Percent

PHOENIX – US Airways Group Inc. on Thursday said profit edged up 2 percent in the first quarter on modest revenue growth, and the airline company backed its forecast for a profitable year.

The news sent shares in the Tempe, Ariz.-based company up nearly 3 percent in midday trading on the New York Stock Exchange.

Earnings totaled $66 million, or 70 cents per share, for the January-March period compared with $65 million, or 76 cents per share, in the first quarter of 2006. Excluding one-time credits and other items, earnings per share would have totaled 37 cents versus 5 cents a year ago.

Revenue grew 4 percent to $2.73 billion from $2.63 billion a year earlier.

Analysts polled by Thomson Financial, on average, forecast earnings of 12 cents per share and revenue of $2.74 billion. Those estimates typically exclude one-time items.

Chairman and Chief Executive Doug Parker called the quarter "extremely difficult," citing bad weather which closed the airline’s Philadelphia hub temporarily and disrupted operations across the Northeast and a switchover to a single reservation system which disrupted service.

Parker said higher fuel prices are "once again having a material effect on our outlook." He expects fuel costs to exceed the budget by $300 million in 2007, but still expects a profitable second quarter and full year.

US Airways Group, formed by the September 2005 combination of bankrupt US Airways and America West Airlines, posted a full-year profit of $303 million in 2006.

It made an unsuccessful takeover bid for Delta Air Lines Inc. but dropped the offer amid resistance from Delta and its creditors.

US Airways shares rose $1.24, or 2.9 percent, to $43.89 in midday trading on the NYSE.