(AP) - Northwest Airlines Corp. reported a second-quarter loss of $377 million on Wednesday as it took another large accounting charge and fuel expenses continued to rise sharply.
Northwest shares jumped 94 cents, or 10.4 percent, to $10.02 in morning trading.
The Eagan, Minn.-based carrier lost $1.43 per share on revenue of $3.58 billion.
During the same period last year, when Northwest emerged from bankruptcy protection, it made a profit of $2.15 billion, including $1.94 billion in bankruptcy items. It would have made $273 million a year ago without bankruptcy items.
Northwest said it would have earned $170 million for the most recent quarter if not for a non-cash accounting charge of $547 million. It also benefited from a $250 million fuel hedging gain.
Analysts surveyed by Thomson Financial forecast a loss of 54 cents per share on revenue of $3.44 billion. Analysts do not generally include one-time items.
Northwest said it paid $3.45 per gallon for jet fuel during the second quarter not counting taxes and fuel hedges, up 69.3 percent from a year ago.
The carrier said it is aiming to finish its buyout by Delta Air Lines Inc. during the fourth quarter.
A prepared statement from the company said the deal with Delta "is even more compelling in the current environment and brings together two airlines that have both successfully restructured and have unique and non-replicable assets."
Northwest ended the quarter with $3.3 billion in unrestricted cash.
Northwest, which like other carriers has been raising fares and adding fees, said passenger unit revenue rose 6.1 percent across its system. Capacity rose 3.6 percent.
Northwest has said it plans to increase capacity 2 percent to 3 percent during the third quarter -- a time when many airlines have said they will cut the number of seats they offer.
At Northwest, a large run-up in new regional seats as it buys new 76-seat jets will offset a planned cut in mainline capacity of as much as 2.5 percent.
For the full year, Northwest said it expects system capacity will rise as much as 1.5 percent.
Northwest has said it wants to reduce the size of its frontline and management work force by 2,500 people. It is aiming to use voluntary means such as early retirement and attrition, but said it would furlough workers if necessary.
Also on Wednesday, Northwest spokeswoman Tammy Lee confirmed that the operations center for the combined Delta-Northwest would be in Atlanta, where the airline will be based.
Lee said the transition will happen once the operations of the two airlines are combined, which is expected to take one to two years after the deal closes. She said most workers at the Northwest operations center are considered front-line workers and would be offered jobs in Atlanta.
Northwest's earnings report came a day after a broad rally in airline shares. The Tuesday run-up was the third-best day for airline shares since deregulation in 1978, JPMorgan analyst Jamie Baker wrote in a note on Wednesday.
The AMEX Airline Index rose 22.1 percent on Tuesday, behind only gains of 25.5 percent in July 1980 and 28.7 percent in October 1982 in the S&P Airline Index, Baker wrote.
Baker attributed Tuesday's run-up to a big cash infusion at United Airlines, "proving once again that the capital spigot for airlines remains open for now," Baker wrote.
(Copyright 2008 by The Associated Press. All Rights Reserved.)