City analysts welcomed profits of pounds 14.4m in the three months since March 10. The results were at the top end of the range of analyst's forecasts.
The ferry operator's market share slipped slightly after Eurotunnel, its biggest rival, bounced back from results which had been disrupted by the aftermath of the fire in the Chunnel in November 1996.
P&O Stena took 33 per cent of all tourist vehicles and 45 per cent of freight, against a market share of 49 per cent and 31 per cent for Eurotunnel.
Losses to Eurotunnel were offset by a 12 per cent rise in tourists taking their cars to the Continent. Profits were also helped by the end of a price war caused by overcapacity in the cross-Channel market.
P&O Stena began in 1996 as a joint venture between P&O and Stena, the Swedish shipping company, with the aim of of cutting overcapacity in cross- Channel travel.
Job losses stemming from the merger of the two are expected to amount to around 1,000 by the time operations are fully merged. Stena's headquarters in Ashford, Kent, and three ships have been targeted as part of the merger.
Both P&O and Stena will be hard hit by the abolition of duty-free goods next year. Stena yesterday posted a loss for the first half of the year of 530m Swedish crowns.