Tag: profit (Page 4 of 4)

Norwegian Air to Lease Planes, Turn Profitable in 2019

March 25, 2019 / WIL BALDWIN

OSLO (Reuters) – Norwegian Air will lease planes and postpone the sale of older models in its fleet following the grounding of Boeing 737 MAX aircraft, the airline said on Monday.

The budget carrier will also use some of its bigger Boeing 787 Dreamliners to offset the effects of the grounding of its 18 MAX jets – about 11 percent of its fleet.

The 737 MAX was grounded worldwide this month following a deadly crash in Ethiopia.

“In addition to continuing combining flights and reallocating aircraft, the company has decided to delay potential sales of six Boeing 737-800 aircraft and use available 787 Dreamliner capacity on high-volume routes, which will add flexibility,” Norwegian said in a statement.

“The company is further preparing to wetlease aircraft to fill the remaining capacity gap,” it added, referring to the industry practice of renting fully-staffed aircraft for a period of time.

Norwegian said earlier this month it would seek compensation from Boeing for costs resulting from the grounding of the global MAX fleet.

“The company has a good dialogue with Boeing and is confident of reaching a constructive agreement,” Norwegian said, without elaborating.

Norwegian Air CEO repeats plan to turn profitable in 2019

Norwegian Air aims to turn profitable this year, its chief executive said on Monday, reiterating plans to turn around the situation at the loss-making budget airline.

“We aim to become profitable in 2019,” Bjoern Kjos told Norwegian public broadcaster NRK. “We’re managing well as an independent company.”

(Reporting by Terje Solsvik)

Boeing Profit Beats; Targets 900 Plane Deliveries in 2019

January 30, 2019 / WIL BALDWIN

(Reuters) – Boeing Co topped expectations with both quarterly profit and its forecast for 2019 cash flow on Wednesday, as a boom in air travel underpinned a prediction for full-year deliveries of around 900 commercial airplanes.

The company said it expects to deliver between 895 and 905 commercial aircraft in 2019, up from the 806 units it delivered last year, which kept it ahead of rival Airbus as the world’s biggest planemaker for the seventh straight year.

Boeing’s shares rose 6.4 percent to $388.25 in early trading in response, helping lift the U.S. stock futures.

Investors closely watch the number of planes Boeing turns over to airlines and leasing firms in a year for hints on the company’s cash flow and revenue.

The company forecast operating cash flow between $17 billion (13 billion pounds) and $17.5 billion in 2019, compared with cash flow of $15.32 billion in 2018, and above analysts’ average estimate of $16.73 billion, according to IBES data from Refinitiv.

It expected 2019 core earnings between $19.90 per share and $20.10 per share, and revenue between $109.5 billion and $111.5 billion.

Those numbers indicate that the fuselage and engine delays at suppliers that dominated last year are largely behind Boeing.

Boeing’s core earnings rose to $5.48 per share in the fourth quarter ended Dec. 31, from $5.07 per share a year earlier, and came in above Wall Street’s estimate of $4.57 per share.

Quarterly revenue rose 14.4 percent to $28.34 billion, above analysts’ average expectation of $26.87 billion.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Sriraj Kalluvila)

Image from http://www.boeing.com

Union Pacific Profit Beats Estimates

January 24, 2019 / WIL BALDWIN

(Reuters) – Union Pacific Corp (UNP.N), one of the biggest U.S. railroads, on Thursday reported higher-than-expected quarterly profit and said efficiency gains will bolster profits in 2019.

Shares in the company, which connects 23 states in the western two-thirds of the United States by rail, rose 3.3 percent to $159.37.

Its operating ratio – a measure of operating expenses as a percentage of revenue and a key metric for Wall Street – improved 1.1 points to 61.6 percent in the fourth quarter from the same period last year, the company said.

A lower ratio means more efficiency and higher profitability.

“We expect (2019) operating margins will increase as a result of solid core pricing gains and significant productivity benefits,” Chief Executive Lance Fritz said in a statement.

The Omaha, Nebraska-based company this month hired former Canadian National Railway Co (CNR.TO) executive and turnaround expert Jim Vena as its chief operating officer and said its operating ratio would fall below 60 percent by 2020.

Vena worked with Hunter Harrison, who led the revival of two Canadian railroads and died in 2017 after a short stint as CEO of CSX Corp (CSX.O), which recently set a 2019 target for a sub-60 percent operating ratio.

Union Pacific is cutting jobs, consolidating businesses and selling a corporate retreat to drive costs lower.

On a conference call on Thursday, Vena said “everything is on the table” as Union Pacific looks for further efficiency gains.

“I know the railroad has a vision in place to get to a 55 operating ratio already, and we’ll be working aggressively towards that goal,” Vena said.

Net income fell to $1.55 billion, or $2.12 per share in the fourth quarter, from $7.28 billion, or $9.25 per share, a year earlier when the company received a boost from changes in U.S. tax laws.

Freight revenue in the quarter rose 6 percent, lifting total operating revenue to $5.76 billion from $5.45 billion. Net core pricing was up 2.5 percent from the year-ago quarter.

Analysts, on average, expected a profit of $2.06 per share and revenue of $5.74 billion, according to IBES data from Refinitiv.

Terminal dwell, the amount of time rail cars sit idle in a terminal, was 26.7 hours for the quarter, an 18 percent improvement versus a year ago.

Union Pacific and Berkshire Hathaway-owned (BRKa.N) BNSF are the largest U.S. freight rail operators with annual revenue of more than $20 billion each.

(Reporting by Lisa Baertlein in Los Angeles and Rama Venkat in Bengaluru; Editing by Shailesh Kuber, Steve Orlofsky and Will Dunham)

Image from http://www.up.com

LATAM Airlines Posts Steep Third-Quarter Profit Fall

November 21, 2018 / WIL BALDWIN

SANTIAGO (Reuters) – LATAM Airlines (LTM.SN), the biggest airline group in Latin America, reported a steep fall in third-quarter profit due to lower passenger demand in Argentina and Brazil as well as higher fuel prices and competition from low-cost airlines.

LATAM reported a net profit of $53 million for the quarter, down from $160 million a year earlier, according to a securities filing.

But it said it was maintaining its guidance for the year, expecting an overall operating margin for 2018 of between 6.5 and 8 percent. It is focused on cost-cutting to offset higher expenses.

“We are transporting more passengers with a leaner organization,” a company executive told analysts on a conference call.

Morgan Stanley raised its target price for LATAM shares traded in the New York stock exchange to $9 following the earnings release, from a previous target price of $8.80.

Shares were up 3.4 percent at $9.26 on Wednesday morning.

Demand in the quarter slowed in Brazil due to a weaker local currency, and demand fell significantly in Argentina, where the local currency faced an abrupt devaluation during the quarter, reducing passengers’ purchasing power.

“We carried more passengers in all our markets except Argentina, where we cut capacity this year,” an executive said.

Lower demand and increased fuel expenses due to higher oil prices has slashed profits across regional airlines. One of LATAM’s biggest competitors, Brazil’s Gol Linhas Aereas Inteligentes SA (GOLL4.SA), reported a loss of $110 million during the quarter.

Market conditions prompted LATAM to renegotiate commitments for future aircraft purchases, achieving a reduction of $2.3 billion in fleet expenses through 2021, the company said.

The airline will also boost the number of available seats in some of its aircraft by 3 percent as improving utilization and seat count may allow it to grow with fewer aircraft.

Revenue declined by 5 percent to $2.5 billion in the quarter compared with the same period in 2017.

In the quarter, LATAM spent the equivalent of 30 percent of its revenue on fuel, compared with 21 percent a year earlier.

In comparison, Gol spent 37 percent of its revenue on fuel in the same quarter, up from 26 percent a year earlier.

(Reporting by Antonio de la Jara in Santiago and Marcelo Rochabrun in Sao Paulo; Writing by Marcelo Rochabrun; Editing by Bernadette Baum)

General Dynamics Tops Profit Estimates

October 24, 2018 / WIL BALDWIN

Oct 24 (Reuters) – U.S. aerospace and defense company General Dynamics Corp beat analysts’ estimates for quarterly profit on Wednesday, helped by higher demand for its IT services by U.S. government agencies.

The company closed its $9.7 billion purchase of IT services-heavy CSRA Inc in the middle of the year. This was the first full quarter for General Dynamics to report the results of that business as the U.S. government is in the midst of a broad modernization effort.

Revenue rose at all of the company’s businesses, with its information technology unit recording the biggest jump.

Revenue from the IT business more than doubled to $2.31 billion, as integration of the unit continued and the business won several contracts during the quarter. Major wins during the quarter for the unit included a $330 million contract from the U.S. Census Bureau and a $210 million contract from the Centers Medicare & Medicaid Services.

Profit margins at the IT services business slipped from 9.5 percent to 6.8 percent compared to the same period a year ago. Total operating margins for General Dynamics were 12.5 percent, down from 14 percent in the same period last year.

Revenue from the company’s aerospace division, which makes business jets, rose 1.8 percent. Total new Gulfstream deliveries, a key metric for investors, fell to 27 from 30 compared with the third quarter last year. But compared with the second quarter, deliveries rose by one jet and large-cabin Gulfstream deliveries rose to 21 from 18 in the second quarter.

Net earnings rose 11 percent to $851 million in the third quarter ended Sept. 30.

On an adjusted basis, the company earned $2.89 per share, beating Refinitiv estimates of $2.76.

Total revenue rose 20 percent to $9.09 billion, but fell short of estimates of $9.38 billion.

The company’s total backlog at the end of third-quarter 2018 was $69.5 billion, up 4.9 percent from second-quarter 2018. The biggest backlog contributor came from a $3.9 billion contract from the U.S. Navy for the construction of four (DDG-51) guided-missile destroyers.

(Reporting by Mike Stone in Washington and Sanjana Shivdas in Bengaluru; Editing by Shounak Dasgupta and Susan Thomas)

Is American Airlines Recession Proof?

October 22, 2018 / WIL BALDWIN

In recent years, American Airlines (NASDAQ: AAL) CEO Doug Parker has been one of the most vocal advocates of the idea that industry consolidation has permanently transformed the U.S. airline business. Whereas airlines have historically lost huge sums of money during periodic industry busts, Parker has boasted that American Airlines will never lose money again.

Yet on the surface, management’s optimistic outlook seems to clash with a trajectory of declining profits at American Airlines. If the company is struggling to maintain its profitability in a robust economy, one could reasonably wonder how it would do in an economic downturn. Indeed, American Airlines stock is down 38% year to date, so investors clearly are skeptical.

Click the link below for the full story!

Is American Airlines Recession Proof?

United Airlines Raises Profit Forecast

July 23, 2018 / WIL BALDWIN

* Q2 adjusted profit tops estimates

* Q2 revenue up 7.7 pct

* Shares rise 4.2 pct after the bell (Compares with estimates, updates shares)

July 17 (Reuters) – United Airlines raised its profit forecast for 2018 on Tuesday, as average fares and traffic both rose and it trimmed capacity expansion in the face of soaring fuel costs.

Shares of United rose as much as 4.2 percent in trading after the bell as the airline’s second-quarter profit also topped analysts’ estimates.

The third-largest U.S. airline forecast adjusted profit for the full year at between $7.25 and $8.75 per share, up from its previous range of $7.00 to $8.50 per share.

Bigger rivals Delta Air Lines Inc and American Airlines Group Inc have both cut their full-year earnings forecasts in light of rising oil prices.

The Chicago-based carrier cut its plans for capacity growth for the year to a rate of between 4.5 percent and 5 percent, a company spokesman said. It had previously forecast a range of between 4.5 percent and 5.5 percent.

The company said net income fell to $684 million, or $2.48 per share, in the quarter ended June 30 from $821 million, or $2.67 per share, a year earlier, hit by an already-flagged $105 million write-down of the value of its Brazil routes.

On an adjusted basis, the airline earned $3.23 per share, beating analysts’ estimates of $3.07, according to Thomson Reuters I/B/E/S.

Total operating revenue rose 7.7 percent to $10.78 billion, while average fares rose 1.5 percent.

Fuel costs, which accounted for a quarter of United’s total costs, surged 43.2 percent, reflecting a steep rise in crude oil prices since early 2016.

United said it paid $2.26 per gallon for aircraft fuel on average, up from $1.63 a year earlier.

Shares of the airline have risen 7.7 percent this year, compared with a 13.9 percent fall in the S&P 500 Airlines index .

(Reporting by Sanjana Shivdas in Bengaluru; Editing by Anil D’Silva)

Norwegian Air to Lease Planes, Turn Profitable in 2019

Boeing Profit Beats; Targets 900 Plane Deliveries in 2019

Union Pacific Profit Beats Estimates

LATAM Airlines Posts Steep Third-Quarter Profit Fall

General Dynamics Tops Profit Estimates

Is American Airlines Recession Proof?

United Airlines Raises Profit Forecast

Archives