British Airways plc, Europe's #3 airline and the U.K.'s biggest, announced this morning Q4 2006 earnings of 8.9 pence/share (£103m), down -12% from 10.3 pence/share (£117m) in Q4 2005. Revenues were £2.1 billion. Analysts had forecasted income of £109m. The airline averted a flight-attendants strike this week, but lost £80m in the scuffle, causing CEO Willie Walsh to cut its full-year growth guidance to 3.25-3.75% from 4.5-5%. Margins were down to 6.2% from 8.6% over increased fuel and pension costs. Passengers flown and load factor (proportion of seats sold) were flat at 8.53m and 73.7%. The company cut its net debt in 2006 by £775 million to £866 million; cash rose £203 million to £2.64 billion. British Airways plc shares are trading up 2.3% in London.
Sources: Bloomberg, MarketWatch
Commentary: British Airways: Strike That Never Was Will Still Cost It • Which Direction For Airline Stocks?
Stocks/ETFs to watch: British Airways plc (NYSEARCA:BAB). Competitors: Air France - KLM (AKH), AMR Corp. (AMR), UAL Corp. (UAUA), Continental Airlines Corp. (NYSE:CAL), US Airways Group Inc. (LCC). ETFs: iShares MSCI United Kingdom (NYSEARCA:EWU)
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