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Airline Economics United Earnings Edition

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by Felix Salmon
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Disappearing Stock-Market Earnings   The Global Crisis

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Oct 21 2008 3:59pm EDT

Airline Economics, United Earnings Edition

It's not easy, being an airline. Thanks to high fuel costs, United lost $252 million in the third quarter, on an operating basis. On the other hand, United was hedged. And as a result of those hedges, United ended up losing, um, $779 million. As a result, United stock rose by 9% today, to $13.75 a share.

In case you were wondering, United's annual earnings per share are -$24.61. And I can't find a Q3 balance sheet, but at the end of Q2, UAL Corp had net tangible assets of -$3.3 billion -- and it's surely even deeper in the hole now. Who's buying these companies with negative net worth? I have to admit I don't get it at all.

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