Air Canada shares jump on record earnings
MONTREAL — Air Canada (TSX:AC) shares jumped almost 10 per cent Tuesday as the airline reported record second-quarter earnings and a well-received outlook.
The company posted profits of $300 million for the quarter ending June 30, up from the $186 million a year ago, as traffic increased while costs dropped.
The strong traffic numbers were highlighted on June 29, when Air Canada set what is says is its all-time record of nearly 167,000 passengers — a level the company expects to beat this coming August long weekend, says CEO Calin Rovinescu.
“Demand remains strong, within a stable fuel and pricing environment, as we move into what is traditionally our most important quarter,” Rovinescu said on an analyst call.
RBC Capital Markets analyst Walter Spracklin said the results came in well ahead of expectations, with strong showings across all metrics and more to come in the future.
“The company exceed expectations that were already revised higher,” he wrote in an analyst note.
Spracklin said Air Canada’s prospects would continue to improve as it reduces debt and boosts cash flow, with the company just at the start of a trend that will be fully felt by 2022.
“With the solid execution in the first half of 2017 and fundamental trends all pointing in the right direction, we remain positive on the AC shares.”