Earnings Preview: Continental Airlines

Jan.19.10 | About: United Continental (UAL)

Continental Airlines (NYSE:CAL) is expected to report Q4 earnings Wednesday, January 20, with a conference call scheduled for Thursday, January 21 at 10:30 am ET.

Guidance

Analysts are looking for EPS of (10c) on revenue of $3.19B. The consensus range is very wide at (30c)-3c for EPS, and $3.14B-$3.33B for revenue, according to First Call. As recently as January 15, the stock was trading just under its 52-week high of $21.33. Technical indicators are bullish, as Continental has had a 75% run from $12 to $21 since early November. It’s currently trading above its 50 and 200 day moving averages.

Analyst Views

Despite the recent, out-sized move, on December 18 CAL was downgraded to Hold from Buy at Stifel Nicolaus based on valuation. In addition, it was downgraded to Sell from Buy at Argus on November 24. On January 8, Continental joined the other major airlines in raising its baggage fees in an attempt to increase profitability. December operational performance came in at record levels suggesting the company is executing well. However, the recent run-up in the stock may already reflect this. Investors will be looking to see if Continental I hvccan break out to a fresh 52-week high when it reports on Wednesday.