WestJet Earnings: Profit Soars Almost 275% On Higher Earnings
CALGARY - WestJet has seen its second-quarter profits soar almost 275 per cent as higher fares and cost controls helped offset increased fuel prices, the Western Canada-based airline said Thursday.
"We saw improvements in our key operational metrics this quarter and also kept our controllable costs in check, which contributed to our strong results," president and CEO Gregg Saretsky said in a release.
WestJet said profits were $25.6 million, or 18 cents per share in the quarter, up 274.7 per cent from net earnings of $6.8 million or five cents in the same 2010 quarter.
Revenues were up 21.4 per cent at $742.3 million from $611 million in the 2010 period.
Analysts polled by Thomson Reuters were on average expecting WestJet to report earnings of nine cents per share and revenue of $734 million.
Revenue per available seat mile, or RASM, was 14.17 cents, up from 12.24 cents.
"WestJet anticipates continued year-over-year RASM growth for the third quarter of 2011 based on advanced bookings," the airline said.
"However, this year-over-year growth is expected to come at a moderated pace versus that seen during the first half of 2011 since the pricing environment was more robust during the second half of 2010 as compared to the first half of 2010."
In an effort to compete more effectively with Air Canada, the country's biggest airline, WestJet (TSX:WJA) has been looking to draw more international traffic into its network.
WestJet's fleet consists only of Boeing 737 aircraft, which are not capable of making long-haul journeys to Asia or Europe. So the company has been seeking partnerships with other carriers to expand its global reach.
In the United States, WestJet is working with American Airlines and Delta. On the international front, WestJet has announced partnerships with British Airways, Cathay Pacific, China Airlines, Air France and KLM.
WestJet is also looking to beef up its presence in the ultra-competitive Toronto-Ottawa-Montreal circuit by offering various perks to business travellers.