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Air France-KLM's 3Q Profit Rebounds
Thursday February 16, 8:03 am ET
Air France-KLM's Third-Quarter Profit Rebounds but Lower Than Expected
PARIS (AP) -- Air France-KLM, the world's largest airline by revenue, said Thursday its third-quarter net profit more than tripled, but operating profit came in lower than expected as fuel costs soared.
The Franco-Dutch carrier said net profit in the October-to-December period rebounded to 77 million euros ($91.66 million) from 23 million euros in the same period in 2004.
Third-quarter revenue rose 12.4 percent to 5.4 billion euros ($6.43 billion).
Operating profit in the third quarter surged to 190 million euros ($226.18 million) from 20 million euros in the same period a year earlier. But analysts had expected even more, with estimates averaging 205 million euros ($244 million).
Third-quarter earnings were held back by a 27.4 percent rise in fuel costs to 1 billion euros ($1.19 billion), Air France-KLM said, while passenger traffic rose 11 percent in the period.
Thijs Berkelder, a transportation analyst at Belgian brokerage Petercam, said fuel costs explained the slightly lower-than-expected operating profit for the quarter. But he said through hedging, in which airlines buy future fuel at set prices, Air France-KLM is likely to make up for the fuel cost rise in the fourth quarter.
Air France-KLM said in a statement that if current market conditions persist, it "has an objective of operating income for the full year of over 900 million euros ($1.07 billion)." The company had previously forecast a "clearly positive" operating result.
But in the nine months to Dec. 31, Air France-KLM had an operating profit of 940 million euros ($1.12 billion), so Thursday's statement leaves open the possibility that the airline could lose money in the fourth quarter.
The airline said the January-March period is traditionally weak because of seasonal factors, and will also be affected this year by late Easter holidays, in April -- after the close of its financial year.
In last year's fourth quarter, Air France-KLM just managed to squeeze out an operating profit of 9 million euros.
Air France-KLM shares were virtually flat at 20.32 euros ($17.06) in Paris trading. |
