=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/04/15/f= inancial0854EDT0032.DTL ---------------------------------------------------------------------- Tuesday, April 15, 2003 (AP) Continental Airlines reports wider first quarter loss (04-15) 06:04 PDT HOUSTON (AP) -- Continental Airlines reported a wider first quarter loss Tuesday, blaming higher fuel prices and other effects from the war in Iraq. Still, the results were better than Wall Street had estimated. For the quarter ended March 31, the carrier, lost $221 million, or $3.38 per share, compared with a loss of $166 million, or $2.61 per share a year earlier. A nearly 64 percent rise in fuel prices, year over year, added $135 million of additional expenses, the company said. Meanwhile, the war in Iraq and fear about the spread of SARS, or severe acute respiratory syndrome, resulted in a steep decline in travel to abroad. Continental's lastest results included a previously announced after-tax special charge of $41 million, or 63 cents per share, primarily related to the reduced market value of the Houston-based air carrier's MD-80 fleet and spare parts associated with grounded aircraft. Excluding the charge, Continental lost $180 million, or $2.75 a share. Analysts had expected the airline to lose $2.80 per share, according to Thomson First Call. "In spite of the convergence of a war, domestic terrorism, SARS, a poor economy and high fuel prices, coupled with one of the highest tax burdens of any industry, we're going to make it across the finish line," Gordon Bethune, Continental chairman and chief executive, said Tuesday. Company officials said aggressive cost-cutting measures and new revenue-generating activities implemented in late 2002 were leading to a $400 million pre-tax improvement in annual operating results. In March, Continental introduced additional measures designed to improve its current 2004 outlook by $500 million pre-tax. "We are not sitting idly by and waiting for the revenue picture to improve," Jeff Misner, Continental's senior vice president and chief financial officer, said. "Our goal is to align our cost structure with the revenue environment that exists today." Work force reductions continued as part of the initiative, and company executives warned that more staffing reductions may be necessary if demand continues to soften. During the quarter, Continental cut its senior executive staff by more than 25 percent. The cutbacks come as an extended travel slump has dragged two major carriers ,United Airlines and US Airways, into bankruptcy protection. US Airways emerged this month, but American Airlines could take its place as early as Tuesday if its employees don't ratify $1.8 billion in annual concessions that their unions tentatively agreed to two weeks ago. Wall Street analysts are predicting quarterly losses of as much as $3.5 billion. To put that into perspective, the nine largest U.S. airlines lost a combined $3.3 billion during the first complete quarter following the Sept. 11 attacks. Since the terrorist attacks of Sept. 11, 2001, Continental has reduced total management and clerical positions by 21 percent; the number of pilots, flight attendants, agents, mechanics and other operational positions have been pared by 15 percent. =20 ---------------------------------------------------------------------- Copyright 2003 AP