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UPDATE 2-United Airlines profit up on higher fares, last-minute purchases

(Adds background on storms)

NEW YORK, Jan 23 (Reuters) - United Continental Holdings Inc reported a greater-than-expected jump in quarterly profit on Tuesday, helped by higher fares and more last-minute ticket purchases.

The No. 3 U.S. carrier by passenger traffic reported fourth-quarter net profit of $580 million, or $1.99 per share, compared with $397 million, or $1.26 per share, in the year-ago quarter.

Excluding special charges, United reported profit of $1.40 per share, beating Wall Street's average estimate of $1.34 per share, according to Thomson Reuters I/B/E/S.

United shares rose almost 3 percent in after-hours trading.

In the fourth quarter, United posted a 0.2 percent increase in passenger unit revenue, in line with its earlier outlook.

Costly last-minute ticket purchases are generally a boost to airlines, especially during pricing peaks such as the busy holiday season.

The Chicago-based airline's results follow a strong fourth-quarter performance and quarterly outlook by rival Delta Air Lines Inc, which reported better-than-expected profit earlier this month.

Shareholders are keeping a close eye on United's bottom line after an underwhelming third quarter sent shares tumbling.

Cancellations in that quarter caused by a rash of powerful Atlantic hurricanes and a fierce fare war with low-cost competitors cost the airline several hundred millions of dollars.

United also faced storm disruptions in the fourth quarter and is still struggling with increased competition in its hubs, putting pressure on its profit margin. (Reporting by Alana Wise; editing by Bill Rigby)