Reuters: Hot Stocks: UPDATE 2-Ryanair warns weak bookings to drag on profits

Reuters: Hot Stocks Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Dropbox for Business Keep your files and organization in sync. Dropbox for Business has unlimited space, file sharing, and admin tools to manage your team. Start a free trial at no cost. From our sponsors

UPDATE 2-Ryanair warns weak bookings to drag on profits Sep 4th 2013, 08:36 Wed Sep 4, 2013 4:36am EDT * Says could miss previously announced profit forecast * Cites competition, austerity, weaker sterling * To respond with "aggressive seat sales" * Shares fall as much as 15 percent (Adds more analyst comment, shares, background) By Conor Humphries DUBLIN, Sept 4 (Reuters) - Ryanair, Europe's biggest budget airline, could miss its full-year profit forecast following a dip in bookings, it said on Wednesday, blaming growing competition and a drop in the value of the British pound. Shares in the Irish group, which has routinely beaten profit forecasts in recent years, dropped as much as 15 percent to a five-month low, dragging down other airline stocks. "This is a surprise statement from Ryanair and comes contrary to some of the commentary from the peer group and indeed Ryanair's own commentary at its June investor days," said Goodbody analyst Donal O'Neill. Airlines across Europe have been struggling with weak economies, high fuel prices and costly fleet upgrades. While Ryanair has fared better than most thanks to its focus on low prices, it faces competition from other airlines looking to win business in the budget segment of the market. Goodbody analysts said Norwegian, Aer Lingus and IAG subsidiaries Iberia and Vueling had all stepped up competition to Ryanair. The Irish airline said it had noticed a "perceptible dip" in yields - average revenue per mile per passenger - for September, October and November, and cited increased competition in Britain, Scandinavia, Spain and Ireland. It also said an austerity drive across Europe and a weaker British currency were hurting demand. Ryanair makes about a quarter of its revenue in Britain. As a result, the group said net profit for the year ending March 2014 was likely to be at the bottom end of its previously guided range of 570-600 million euros ($750-789 million). Most analysts had expected the airline to comfortably beat that forecast range, with a company poll in July forecasting a full-year net profit of 643 million euros. "If fares and yields continue to weaken over the coming winter there can be no guarantee that the full year outturn may not finish at or slightly below the lower end of this range," Ryanair said. The last time Ryanair warned profits would be at the bottom of a previously guided range was 2009, while it last issued a full profit warning in 2004. Chief executive Michael O'Leary said Ryanair would respond to weak bookings by cutting capacity for the year to 81 million seats from 81.5 and by introducing "aggressive seat sales" particularly in the UK, Scandinavia, Spain and Ireland. At 0815 GMT, Ryanair shares were down 13.7 percent at 5.847 euros, the biggest decline by a European blue-chip stock . British rival easyJet was down 7.5 percent. Ryanair's statement made no reference to recent media reports questioning the airline's safety record. ($1 = 0.7601 euros) (Editing by Jane Merriman and Mark Potter) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions