UPDATE 2-Alaska Air quarterly profit jumps 13.8 pct, but shares fall

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July 26 (Reuters) - Alaska Air Group Inc on Wednesday posted a 13.8 percent rise in quarterly profit, helped in part by the December 2016 acquisition of former rival Virgin America.

Shares of Alaska traded 2 percent lower at midday as airline stocks fell sector-wide, but rebounded from earlier lows.

Alaska, now the fifth-largest U.S. carrier by passenger traffic, reported second-quarter net income of $296 million, or $2.38 per share, up from $260 million, or $2.10 per share, in the period a year earlier.

The Seattle-based carrier posted adjusted earnings of $2.51 per share, just short of analysts' consensus forecast of $2.52 per share, according to Thomson Reuters I/B/E/S.

Quarterly passenger unit revenue, which compares sales to flight capacity, rose 1.3 percent in the period ended June 30.

Earnings from the prior year do not include Virgin America's results.

"We had a very solid quarter, driven by a growing customer base and strong revenue performance," Alaska Air Chief Executive Brad Tilden said in a statement, noting "a number of operational challenges" as the two airlines unite.

Total operating revenue rose 40.7 percent to $2.10 billion, in line with analysts' consensus estimate.

Looking ahead to the third quarter, Alaska Air said it plans to increase capacity, or how many seats an airline flies and how far it flies them, by 8 percent. (Reporting by Alana Wise in New York and Ankit Ajmera in Bengaluru; editing by G Crosse)