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Airlines

Transportation Sector Defies Market Trend with Airline Stocks Soaring

Strategic Insights

— 1 min read

Despite a decline in major stock indexes on Wednesday, the transportation sector demonstrated resilience with airline stocks leading the way. US Airways, Delta Air Lines, and Northwest Airlines all experienced significant gains, with US Airways increasing by $2.93 3/4 to $54.25, Delta Air Lines up $2.25 to $52.50, and Northwest Airlines adding $2 to $25.93 4.

Key Takeaways:

  • US Airways surged $2.93 3/4 to $54.25, while Delta Air Lines rose $2.25 to $52.50, defying the broader market trend.
  • Northwest Airlines also gained, adding $2 to $25.93 4, as the company faced a wider-than-expected fourth-quarter loss due to a September pilots strike and higher maintenance costs.
  • Morgan Stanley Dean Witter analyst Kevin Murphy attributed Northwest Airlines' decreased profit per passenger to a 5% drop from last year's figures, while costs rose 3% due to the strike and maintenance expenses.
  • Northwest Airlines has reported a 68% decline in passenger traffic in September due to the pilots strike.
  • The company's estimated loss per share is approximately $1.35, based on the average estimate of nine analysts polled by First Call, with a range of losses from 65 cents to $1.80 a share.
  • Electronic Data Systems (EDS) closed higher at $49.93 4, following a rating upgrade from Merrill Lynch.
  • Rockwell International (ROK) rose $1.37 1/2 to $47.56 1/4, as the company prepares to spin off its Conexant communications chip business on January 1.

Statistics:

  • US Airways' gain: $2.93 3/4 to $54.25
  • Delta Air Lines' gain: $2.25 to $52.50
  • Northwest Airlines' gain: $2 to $25.93 4
  • Passenger traffic decline in September: 68%
  • Estimated loss per share for Northwest Airlines: $1.35 (average estimate of nine analysts polled by First Call)
  • Range of estimated losses for Northwest Airlines: 65 cents to $1.80 a share
  • Rockwell International's gain: $1.37 1/2 to $47.56 1/4
  • Electronic Data Systems' closing price: $49.93 4

Sources:

  • "Northwest Airlines Woes Widened" by Deborah Baker, Bloomberg Business, date unspecified
  • "Electronic Data Systems (EDS)" article, unspecified publication, date unspecified
  • "Rockwell International (ROK)" article, unspecified publication, date unspecified

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