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WestJet earnings miss expectations


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WestJet earnings miss expectations

Nov. 9, 2011 - Financial Post

Scott Deveau

WestJet Airlines Ltd. reported a 10% drop in its third quarter earnings Wednesday as a result of 'stubbornly' high fuel prices during the quarter.

The Calgary-based carrier said its net income fell to $39.3-million, or 28¢ a share, compared with $43.8-million, or 30¢ a share, a year ago. Analysts had been expecting earnings of 34¢ a share, according to Bloomberg estimates.

"Despite significantly higher fuel costs, we delivered our 26th consecutive quarter of profitability thanks to the tremendous work by WestJetters and their passion for contributing to, and sharing in, our ongoing success," said Gregg Saretsky, WestJet chief executive, in a statement.

The company's sales improved 13% year over year during the quarter to $775-million. But the company said its fuel costs were also up 27% year over year during the quarter.

"The broader economy continues to experience a great deal of volatility and consumer confidence measures echo that uncertainty, however, we are not seeing this impact reflected in our forward bookings in any significant manner," Mr. Saretsky said.

"We are optimistic that demand for air travel will remain healthy and are confident that with our high-value travel proposition and low-cost business model we will continue to deliver profitable results moving forward," he added.

Unit revenue during the quarter, as measured by revenue per available seat mile [RASM], improved nearly 6% as a result of higher fares during the quarter. WestJet expects 'comparable' RASM growth in the fourth quarter, the company said.

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