British Airways Owner IAG Falls on Disappointment Over Forecast
British Airways parent fell the most in more than three weeks after a raised 2015 profit forecast based on the company's takeover of Aer Lingus lagged behind analysts’ predictions.
IAG dropped as much as 5.1 per cent, the steepest intraday decline since 7 October, and was trading down 4.8 per cent at 569 pence as of 8:26am in London.
Operating profit excluding one-time gains or costs will total €2.25 billion to €2.3 billion this year, versus a prediction that profit would exceed €2.2 billion, London-based IAG said Friday in a statement. That compares with the €2.31 billion average of 16 analyst estimates compiled by Bloomberg.
The company, which also owns Spanish airlines Iberia and Vueling, reported a 39 per cent jump in third-quarter operating profit excluding one-time gains or costs. That was less than a threefold surge in quarterly earnings posted by Air France-KLM Group, Europe’s biggest airline, and a 51 per cent jump at second-ranked Deutsche Lufthansa. IAG, which outlined its first interim dividend of 10 cents a share on Thursday, said the full-year payout will amount to 25 per cent of underlying profit after tax.
“The minor improvement to guidance may disappoint the market, given upward pressure on estimates at other European airlines and considering the new guidance is consistent with current consensus, which seems unlikely to change,” Gerald Khoo, an analyst at Liberum, said in a note to investors.
News by Bloomberg, edited by Hospitality Ireland