Ryanair maintains profit target, expected to beat it

Irish airline Ryanair kept its full-year profit forecast on Tuesday which analysts said it looked to outperform comfortably after first-quarter earnings beat expectations and fares rose.
Europe's biggest low-cost carrier said its net profit for the three months to the end of June fell 24% on disruption caused by a volcanic ash cloud.
It maintained however that after adjusting for the 50 mln euro cost of almost 10,000 flights cancelled in April and May it would be able to grow full-year profit by up to 15%.
"Despite these volcanic ash disruptions Ryanair continues to increase traffic, yields, and profits, while most of our competitors are cutting capacity and reporting losses," Chief Executive Michael O'Leary said in a statement.
Its shares rose 0.2% to 3.785 euros by 1007 GMT, down from a high of 3.94 euros, while the wider Irish market was down 0.9% and the European transport sector fell 0.3%.
Unadjusted net profit for the three months to the end of June came in at 93.7 mln euros, but after adjusting for the airspace closures it rose 1% to 138.5 mln euros, compared with a forecast for pre-exceptional profit of 118.6 mln euros by in-house broker Davy.
Ryanair kept its forecast for full-year net profit to rise to between 350 mln and 375 mln euros before ash costs. It said its forecast was deliberately cautious and analysts and traders agreed the profit projection first made on June 1 was now looking conservative given its ability to keep costs down and raise fares more than expected.
Ryanair said it was on track to raise average fares by up to 10% this year as it shifts capacity from northern to southern European destinations with longer routes and relatively high summer ticket prices.
Air France-KLM, due to present first-quarter results next week, has said its unit revenues had risen strongly in June as growth in passenger and cargo activity outpaced capacity, which it had deliberately held down in the recession.
The budget carrier’s financial health — with a 3.1 bln euro cash pile — stands out in an Irish economy which remains one of Europe's trouble spots, prompting Moody's to cut its sovereign credit rating on Monday citing weak economic growth prospects.
Most of Ryanair's growth comes from the continent, however, and it is reducing capacity in Dublin, blaming a tourist tax introduced last year as part of Ireland's austerity drive.
Ryanair, vying with Deutsche Lufthansa for the position of Europe's biggest airline by market value, said its first-quarter revenue rose 16% to 896.8 mln euros and reiterated its plans to pay its first ever dividend in October.