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UPDATE 1-Qantas expects second-best annual profit, nudges past estimates
May 4, 2017 / 7:15 AM / 7 months ago

UPDATE 1-Qantas expects second-best annual profit, nudges past estimates

* Qantas expects A$1.35 bln to A$1.4 bln full-year profit

* International market challenges moderating

* Revenue falls 1.2 pct in March quarter (Adds CEO comments, share price)

By Jamie Freed

SYDNEY, May 4 (Reuters) - Qantas Airways Ltd, Australia’s No. 1 airline, said it expects to post its second-best annual profit this year, just ahead of analyst estimates, as the domestic market improves and challenging conditions in the international market moderate.

It forecast a full-year underlying pretax profit of A$1.35 billion to A$1.4 billion ($1.00 billion to $1.04 billion) for the year ending June 30, above the average estimate of A$1.34 billion of eight analysts polled by Thomson Reuters I/B/E/S.

Qantas had not previously released full-year profit guidance. The full-year guidance would represent a fall of 8.5 percent to 12 percent from last year’s record A$1.53 billion underlying profit before tax.

“Between our domestic flying businesses, Qantas and Jetstar, and Loyalty we are delivering solid earnings growth,” Qantas Chief Executive Alan Joyce said in a statement.

“Internationally it’s still tough, with high levels of capacity growth pushing fares down, but we’ve seen those conditions ease slightly.”

Qantas’ Loyalty division includes its frequent flyer programme and related businesses.

In the quarter ended March 31, Qantas cut domestic capacity at a time of weak demand but increased international flying in as it added more services to Asia, including the resumption of Sydney-Beijing flights.

The airline reported a 1.6 percent fall in revenue to A$3.96 billion for the quarter.

Qantas shares closed at a nine-year high of A$4.42 on Thursday before the release of its quarterly update. The company is due to hold an investor briefing on Friday. ($1 = 1.3493 Australian dollars) (Reporting by Jamie Freed; Editing by Edwina Gibbs)

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