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.”
Air Canada profit for the quarter amounted to $1.08 per diluted share, compared with a profit of 66 cents per diluted share in the second quarter of 2016.
On an adjusted basis, the airline says it earned $215 million or 78 cents per diluted share for the quarter, up from $203 million or 72 cents per diluted share a year ago.
Revenue totalled $3.91 billion for the three-month period, up from nearly $3.46 billion a year ago, as it increased capacity and saw traffic grow by 13.6 per cent.
The company’s share price was up $1.87 or 9.43 per cent to $21.70 in midday trading.