Wirraway
22nd Jul 2004, 15:23
Fri "The Australian"
Qantas profit to take off: analyst
By Steve Creedy
July 23, 2004
CITIGROUP Smith Barney yesterday raised its 2003-04 net profit forecast for Qantas by 5 per cent to $676 million - and is predicting another significant rise in earnings this financial year.
Respected analyst Jason Smith said the upgraded pre-abnormal profit, 39 per cent ahead of last year, followed a detailed review of assumptions relating to Jetstar's successful launch, the rebound in international demand and future capacity growth.
It had also looked at the Australian dollar and the favourable effect of the jet fuel levy.
Mr Smith upgraded his 2005 financial year net profit forecast by $18 million to $825 million, significantly ahead of consensus estimates of $720 million.
He is predicting the airline will report earnings before interest, tax, depreciation and amortisation of $2.23 billion when it announces its 2003-04 annual results on August 19, growing to $2.78 billion this financial year.
"We continue to believe Qantas's international business will only be in middle cycle earnings in 2004-05 and not reach peak cycle earnings until 2006-07," he said.
Mr Smith said Qantas was seeing greater growth in earnings before interest and tax.
Jetstar was now EBIT-positive with loads of about 76 per cent.
Costs were declining because of a new fleet, greater employee productivity and lower distribution costs.
Better corporate yields and a competitive product also boded well for Qantas.
"We continue to believe Qantas's share price could run up to $3.80-$4 per share by the August result release," he said.
Citigroup has a buy rating with high risk on Qantas, with a 12-month price target of $4.92 to $5.16 per share.
The airline's shares closed at $3.44.
=============================================
Qantas profit to take off: analyst
By Steve Creedy
July 23, 2004
CITIGROUP Smith Barney yesterday raised its 2003-04 net profit forecast for Qantas by 5 per cent to $676 million - and is predicting another significant rise in earnings this financial year.
Respected analyst Jason Smith said the upgraded pre-abnormal profit, 39 per cent ahead of last year, followed a detailed review of assumptions relating to Jetstar's successful launch, the rebound in international demand and future capacity growth.
It had also looked at the Australian dollar and the favourable effect of the jet fuel levy.
Mr Smith upgraded his 2005 financial year net profit forecast by $18 million to $825 million, significantly ahead of consensus estimates of $720 million.
He is predicting the airline will report earnings before interest, tax, depreciation and amortisation of $2.23 billion when it announces its 2003-04 annual results on August 19, growing to $2.78 billion this financial year.
"We continue to believe Qantas's international business will only be in middle cycle earnings in 2004-05 and not reach peak cycle earnings until 2006-07," he said.
Mr Smith said Qantas was seeing greater growth in earnings before interest and tax.
Jetstar was now EBIT-positive with loads of about 76 per cent.
Costs were declining because of a new fleet, greater employee productivity and lower distribution costs.
Better corporate yields and a competitive product also boded well for Qantas.
"We continue to believe Qantas's share price could run up to $3.80-$4 per share by the August result release," he said.
Citigroup has a buy rating with high risk on Qantas, with a 12-month price target of $4.92 to $5.16 per share.
The airline's shares closed at $3.44.
=============================================