Earnings Preview: United Continental Holdings

CHICAGO -- United Continental Holdings Inc., the parent of United Airlines, reports third-quarter results on Thursday after a tough spring and summer spent trying to absorb Continental Airlines.

WHAT TO WATCH FOR: Investors will be watching for an update on the Continental integration, along with some word about how travel demand is holding up.

United and Continental merged in 2010, but the internal work of putting the two airlines together is still going on. As recently as last month United was still shifting planes around to new cities to match the right plane to the right route. And it's been working on major technology issues, too.

As for travel demand, airlines can be among the first to spot a slowing economy, because business people will avoid travel. When Southwest Airlines reported results last week, it said it needed sales to lure business travelers in September, but that things picked up in October. Investors will wonder if United, which caters to business travelers more than Southwest does, is seeing similar trends.

"While data points to recent improvements on the operations front, UAL has come under stress in the summer as its operations significantly underperformed the industry," Barclays analyst David E. Fintzen wrote in an Oct. 17 preview.

WHY IT MATTERS: United's monthly per-passenger growth has been lagging that of its main rival, Delta Air Lines Inc. Over the short run, that's an expected hiccup in the merger with Continental. But over the long run, smaller revenue growth means smaller profits, hurting United's ability to compete with Delta for business travelers.

WHAT'S EXPECTED: Earnings per share of $1.47, on revenue of $9.97 billion, according to FactSet.

LAST YEAR'S QUARTER: Earnings fell 23 percent to $653 million, or $1.69 per share. Revenue rose almost 9 percent to $10.17 billion.