DALLAS (AP) — Continental Airlines Inc. said yesterday that profits rose 15 percent in the second quarter as it carried more passengers and increased revenue on its trans-Atlantic flights.While the strong summer traffic helped Continental beat higher fuel and labour costs, the airline warned that costs will rise in the third quarter.

Houston-based Continental signalled it will slow its ambitious growth plans, a move praised by analysts.

Continental expects capacity to grow three to four percent in 2008, down from an earlier target of five to seven percent. The carrier said it will sell older aeroplanes that get poor fuel mileage.

Continental said it earned $228 million, or $2.03 per share, compared with $198 million, or $1.84 per share a year earlier. This quarter's earnings per share included a charge of seven cents a share for a settlement related to pilots' pensions.

Analysts surveyed by Thomson Financial had expected the company to earn $1.84 per share.

Revenue rose 5.8 percent, to $3.71 billion. That was an increase over $3.51 billion a year earlier, and nearly in line with analysts' prediction of $3.72 billion.

Passenger revenue on trans-Atlantic flights jumped 20.9 percent, compared to a 3.5 percent increase in US revenue. Continental increased capacity on trans-Atlantic routes by 11.8 percent to take advantage of the stronger international market.