Republic takes quarterly loss but beats analyst estimates

February 23, 2011

Republic Airways Holdings Inc. suffered a loss in its fourth quarter as its Frontier Airlines business continued to lose money and its contract business with other airlines remained slower than in 2009.

But the performance of the Indianapolis-based airline easily topped expectations of Wall Street analysts.

Republic lost $1.3 million, or 3 cents per share, in the three months ended Dec. 31, compared with a profit in the same quarter of 2009 of $20.1 million, or 55 cents per share, the company announced Tuesday evening.

However, Republic recorded several special charges in both quarters—including accounting charges in 2009 from its acquisition of Frontier and Midwest airlines, as well as expenses as it retires older planes and enters leases on new ones.

Excluding such charges, Republic would have earned $7.4 million in the fourth quarter, or 18 cents per share, a 252-percent increase from the same quarter the prior year.

On that basis, analysts expected Republic to earn profit of 6 cents to 9 cents per share, according to a survey by Thomson Reuters.

Republic revenue in the fourth quarter rose 2 percent, to $649.8 million. Analysts expected less than $642 million.

For all of 2010, Republic’s performance weakened. It suffered a loss of $13.8 million, compared with a 2009 profit of $39.7 million. Excluding special charges and gains, Republic recorded a 2010 profit of $32.3 million, or 90 cents per share, down from a $35 million gain, or 98 cents per share, the prior year.

Revenue for the year surged 61 percent over 2009—reflecting Republic's acquisitions—to $2.65 billion.

In November, Republic raised $88.5 million by selling 12 million extra shares of common stock, using the money to buy new aircraft and pay down its substantial debt. Since then, Republic’s shares have lost 30 percent of their value.

The shares closed Tuesday at $6.34 apiece—before Republic announced its earnings. The price fell another 3.5 percent Wednesday morning, to $6.11.


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