Northwest Posts Profit From IPO of Unit
Northwest Airlines Corp. posted a fourth-quarter profit on a gain from its regional carrier’s initial public offering, but it swung back to an operating loss without that benefit under the weight of hefty labor costs.
The No. 4 U.S. airline said massive operating losses were not sustainable and that it still needed to cut labor costs to remain competitive.
Including a profit of $299 million from Pinnacle Airlines Inc.’s IPO, Northwest reported net income of $363 million, or $4.18 a share, reversing a net loss of $488 million, or $5.68 a share, a year earlier.
The carrier also benefited from a $45-million gain from the sale of its stakes in online travel companies Hotwire, a unit of InterActiveCorp, and Orbitz Inc.
Shares of Northwest fell 63 cents to $13.36 on Nasdaq.
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