Why United Continental Holdings Inc's Shares Soared Today

Why United Continental Holdings Inc's Shares Soared Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of United Continental Holdings Inc jumped as much as 12.6% today after the company announced December revenue.

So what: The company said revenue per seat mile rose as much as 12.5% in December, and consolidated traffic, or revenue passenger miles, rose 4.1%. The discrepancy is due to higher-than-normal rates in early December due to a late Thanksgiving, and cancelled flights in late December that reduced overall travel.

Now what: The headline numbers are better than actual performance when you include the tailwinds like the date of Thanksgiving and flight cancellations. With that said, increasing revenue for airlines is a strong sign, and we may be seeing the long-term effects of consolidation nationwide. Rates should rise with fewer competitors in the market, so keep an eye on what affect this has on United Continental's earnings, because that's where the rubber really meets the road and tells us if profits will increase, as well.

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The article Why United Continental Holdings Inc's Shares Soared Today originally appeared on Fool.com.

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