United Continental earnings up 38 percent

The parent of United Airlines says its profit rose 38 percent as it spent less on fuel and slightly boosted fares.

United cut flying by 2 percent compared with a year earlier, but passengers paid slightly more to fly. Also, United's fuel bill dropped 10 percent, as it flew less and the price of fuel dropped.

Lower fuel bills helped all of the big airlines in the most recent quarter. In the quarter ended June 30, the per-gallon cost of United's fuel fell 8 percent. But oil prices have risen in recent weeks, likely dampening the relief for airlines.

A year ago, United was struggling to merge some of its large computer systems with Continental, resulting in snafus that frustrated passengers and hurt fares.

A key measure of per-seat passenger revenue rose 1 percent in the most recent quarter as United recovered.

"I am encouraged by the progress we made in the second quarter -- in our operations, in our customer service and in our financial performance," said Jeff Smisek, the airline's chairman, president, and CEO.

United Continental Holdings Inc. (UAL) earned $469 million, or $1.21 per share, for the quarter. It would have earned $1.35 per share if not for special items. That's a penny better than expected by analysts surveyed by FactSet. A year ago it earned $339 million, or 89 cents per share.

Revenue rose almost 1 percent to $10 billion, about what analysts had expected.

Shares of Chicago-based United Continental $1.49, or 4.3 percent, to $33.48, in midday trading.