Air Canada Shares Hit Turbulence, Dives
By Esther Tanquintic-Misa | February 13, 2014 2:11 PM EST
Air Canada's shares hit turbulence on Wednesday after the company announced an unfavorable fourth quarter 2013 results blaming the weak Canadian dollar and severe weather patterns.
Stocks of the country's largest carrier plunged to close at $6.22 on Wednesday, compared to the $7.84 closing on Tuesday.
A tired Air Canada pilot mistakenly believed his jet was about to crash into another aircraft and forced a sudden dive of the plane, injuring several people on board, but the approaching aircraft turned out to be Venus.
The company's fourth quarter 2013 net losses dropped to $6 million from $60 million a year ago. Adjusted net income for the same quarter reached $3 million or one cent per share vs. the $5 million or two cents per share loss a year earlier. Revenue was also up, albeit marginally by $55 million from a year earlier, to reach $2.894 billion for the quarter.
But analysts had expected the airline to earn 12 cents per share in adjusted profits on $2.93 billion of revenues in the fourth quarter.
Air Canada blamed the Polar Vortex and the weak Canadian dollar for its lackluster performance in the fourth quarter of 2013. The December chill diminished earnings before interest, taxes, depreciation, amortization and aircraft rent (EBITDAR) by $15 million in the quarter while the low dollar jacked up by $75 million the airline company's operating expenses.
The relatively low figures has been projected to spill over and could hurt Air Canada's first quarter 2014 performance results.
Calin Rovinescu, Air Canada chief executive officer, forecast first quarter 2014 EBITDAR to be $15 million to $30 million lower than the 2013 level.
"2013 was truly a great year for Air Canada," Rovinescu said.
"In fact, I would say a watershed year. But there is no doubt we still have more to achieve in terms of sustainable profitability and even greater value creation for shareholders."
But "we're confident about our ability to mitigate the financial impact of these challenges."
Analyst believed the company will be able to ride through the unexpected series of turbulence.
"In any major transformational change there will be choppy progress, especially when external factors such as weather and foreign exchange play a role that will impact the pace of this progress," Walter Spracklin of RBC Capital Markets told the Canadian Press.
"Overall, the fourth quarter results and 2014 guidance do not change our view," David Tyerman of Canaccord Genuity wrote in a report.
"Near term results are likely to be negatively impacted by fuel and the weak Canadian dollar, but we expect Air Canada and the industry to recover from this over 2014 by revenue actions and cost improvements."
To report problems or to leave feedback about this article, e-mail:
To contact the editor, e-mail:
Most Popular Slideshows
- Derek Jeter With The New York Yankees Through The Years [IN PICTURES]
- George Clooney And Amal Alamuddin's Wedding In Venice: Photos Of Groom And His Family, Friends [Slideshow]
- NFL Recap - Week 4: Green Bay Packers 38, Chicago Bears 17 [PHOTOS]
- Kendall Jenner Rocks Semi-Nude Balmain Lattice Dress At Paris Fashion Week [PHOTOS]
Join the Conversation
- Forget Nexus 6 Release Date, Android Phones Will Soon Showcase Pure Google Apps & Features
- Galaxy Note 4 Pre Order Starts in the US, Get Samsung Note Ahead of October 14 Release
- $249.99 Motorola Moto 360 Smartwatch's First Promo Out; 'Stone Leather' Replaces 'Gray Leather' - Available In BestBuy [Watch Video]
- iPhone 6 vs Moto G 2014: Motorola’s Budget Smartphone Takes On Apple’s Premium Smartphone
- BlackBerry Passport Sold Out As Preorders Reached 200,000
- iOS 8 And iOS 8.0.2 Security Flaw Revealed, Anyone Can Easily Bypass Touch ID And Passcode Security Features
- Australia Cracks Down On International Money Laundering Syndicate