Ryanair shares fall on broker profit outlook cut

Ryanair shares fell by more than 1.4% after a leading broker significantly lowered its profit forecast for the airline.

Ryanair is due to publish annual results next month and expecting to show an after-tax profit of just over €1bn for the 12 months to the end of March. Its own guidance follows two profit warnings — issued last October and in January — and a third quarter net loss of €20m reported in February.

Goodbody expects Ryanair to post a profit of just €960m for the year, 7% below current consensus forecast.

“On what we see into the summer season, there are few catalysts for the share price,” said Goodbody aviation analyst Mark Simpson.

Lower summer capacity growth forecasts now seem to be more than offset by weakening demand, as seen in EasyJet’s recent guidance cut.

"While Ryanair has always been cautious on summer yields, we expect its commentary on May 20 to be downbeat,” he said.

Goodbody also expects a €10m addition to Ryanair’s unit costs for the year.

Meanwhile, Virgin Atlantic has reported an annual pre-tax loss for the second consecutive year, hit by a shaky economy, the higher costs of fuel generated by a weaker British pound, and problems with Rolls Royce’s Trent engines.

The airline fell back into the red in 2017 after three years of profits, as competition stiffened and the weakening of sterling added to rising fuel costs.

Virgin said its loss before tax and exceptional items was £26.1m (€30.3m) for last year, compared to a loss of £49m in 2017.

Total revenue rose 5.8% to £2.78bn, as passenger numbers grew just under 5% to 5.4m and revenue per customer rose 1.7%.

Additional reporting Reuters

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