=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/2003/10/16/f= inancial1002EDT0052.DTL ---------------------------------------------------------------------- Thursday, October 16, 2003 (AP) Northwest Airlines reports third quarter profit KARREN MILLS, AP Business Writer (10-16) 08:40 PDT MINNEAPOLIS (AP) -- Northwest Airlines Inc. reported its second consecutive quarter of profitability Thursday but warned that the results don't signal an end to its financial troubles. Northwest earned $42 million, or 49 cents a share, in the quarter ended Sept. 30, after a $5 million payout on preferred dividends. That compares with a loss of $46 million, or 55 cents a share, a year earlier. Revenues was essentially flat at $2.56 billion. The results surprised Wall Street. Analysts surveyed by Thomson First Ca= ll has expected a loss of 49 cents a share. Northwest's second-quarter profit of $227 million was due to government reimbursement of security fees and sale of ticket processor WorldSpan. "These results do not signal an end to our challenges or diminish the ne= ed to address our cost structure in light of the changes in the revenue environment," said chief executive Richard Anderson. "While it is encouraging to report a profit, the third quarter is traditionally strong for the industry due to greater demand in the summer months and in particular for Northwest because of its significant Pacific operation, which has an even greater summer demand peak," Anderson said. Northwest will continue to try restructuring its labor costs, he said. T= he Eagan-based airline is seeking to cut companywide labor costs by $950 million per year and is seeking significant cuts from its labor unions. Northwest currently is in contract negotiations with its pilots, represented by the Air Line Pilots Association, and its ground and customer service employees, represented by the International Association of Machinists and Aerospace Workers. The company also has taken other steps to cut costs -- including closing the Michigan reservations center, rescheduling its Memphis hub and dropping domestic mail service -- to further reduce operating expenses and maximize revenues. "At the same time, we remain focused on ensuring that Northwest remains a viable, long-term competitor by prudently investing in new aircraft, facilities and technology, as well as addressing our customers' travel needs by growing our network and utilizing alliances including the Continental and Delta marketing agreement," Anderson added. For the first nine months, Northwest lost $122 million, or $1.48 a share, down from losses of $310 million, or $3.63 a share, a year earlier. Revenues were down slightly to $7.10 billion, from $7.15 billion. Northwest shares gained $1.66, or nearly 13 percent, to $14.41 in late morning trading on the Nasdaq Stock Market. On the Net: Northwest Airlines: www.nwa.com Karren Mills can be reached at kamills(at)ap.org =20 ---------------------------------------------------------------------- Copyright 2003 AP