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Continental Airlines Announces Second Quarter Spec  
User currently offlineDutchflyboi From Netherlands, joined Apr 2008, 333 posts, RR: 0
Posted (6 years 1 month 2 weeks 3 days 20 hours ago) and read 4773 times:

HOUSTON, July 11 /PRNewswire-FirstCall/ -- Continental Airlines, Inc. (NYSE: CAL - News) today announced that it has recorded a number of special items during the second quarter of 2008. The special gains (losses) are as follows (in millions):



Operating special charge (pretax) $(58)

Non-operating items (pretax):
Gain on sale of COPA stock 78
Write down of student loan-related auction rate securities (29)
Total non-operating gains 49

Income taxes:
Special tax credit 28
Tax effect of special items 3

Total special items (after tax) $22


http://biz.yahoo.com/prnews/080711/laf042.html?.v=101

5 replies: All unread, jump to last
 
User currently offlineToxtethogrady From United States of America, joined Dec 2000, 1288 posts, RR: 0
Reply 1, posted (6 years 1 month 2 weeks 3 days 19 hours ago) and read 4652 times:

Why are they still in those student loan derivatives? They're losing multimillions on a stupid bet.

User currently offlineAirStairs From United States of America, joined Jul 2008, 487 posts, RR: 0
Reply 2, posted (6 years 1 month 2 weeks 3 days 18 hours ago) and read 4518 times:



Quoting Toxtethogrady (Reply 1):
Why are they still in those student loan derivatives? They're losing multimillions on a stupid bet.

The auction rate securities market went illiquid around February. I am sure they want nothing more than to unload these; but, the fail rate on this auctions has become obscenely high. There is essentially no one to sell them to. The upside is that if an auction fails, the issuer must pay a penalty rate which after several failures can get into the 20-25% range; clearly though this is not offsetting the writedowns for CO.


AirStairs


User currently offlineDeltaAir From United States of America, joined May 1999, 1094 posts, RR: 0
Reply 3, posted (6 years 1 month 2 weeks 3 days 16 hours ago) and read 4390 times:

The write down of the auction rate securities (ARPS) is more a technicality then anything. As we speak, issuers are redeeming some of these securities at par...so likely CO will receive their original investment at some time down the road.

The market for these securities is for the most part non-existent.


User currently offlineFun2fly From United States of America, joined Dec 2006, 1037 posts, RR: 1
Reply 4, posted (6 years 1 month 2 weeks 3 days 9 hours ago) and read 4116 times:

Funny how companies announce bad news after market close on Fridays to save what is left of their stock price. At least CO's net net was positive. Any bets on the Q2 loss $?

User currently offlineLightsaber From United States of America, joined Jan 2005, 13004 posts, RR: 100
Reply 5, posted (6 years 1 month 2 weeks 2 days 21 hours ago) and read 2132 times:
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Quoting AirStairs (Reply 2):
The auction rate securities market went illiquid around February. I am sure they want nothing more than to unload these; but, the fail rate on this auctions has become obscenely high. There is essentially no one to sell them to.

Its not just airlines being hurt by this. The credit crunch is getting scary.

How this impacts airlines is that its reducing the amount of funds available for travel.

Quoting DeltaAir (Reply 3):
As we speak, issuers are redeeming some of these securities at par.

Not many. Most issuers that sold them are having liquidity issues too. We're in "wave 5" of the credit crunch.

I too am curious as to their final results. I'm more interested in the predictions that oil will break $150/bbl next week.  Sad I'm not thinking oil will go much higher as when our economy starts to really slow, it will slow China and India too. Oh, I expect them to take an ever greater share later...

I wish the other airlines would report as well as CO.

Lightsaber



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