IAG is ‘mindful of wider uncertainties’ despite a strong Q2

By:
on Jul 30, 2023
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  • IAG beats analysts' expectations for profit in Q2 by a whopping 40%.
  • The airline holding company still did not update its full-year outlook.
  • IAG shares are now up roughly 40% versus the start of the year.

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International Consolidated Airlines Group S.A. (LON: IAG) ended 7.0% up on Friday after reporting upbeat results for the second quarter.

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IAG beats analysts’ expectations in Q2

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The airline holding company ended the three-month period with €1.25 billion ($1.38 billion) in operating profit excluding exceptional items that topped experts’ forecast by a whopping 30%.

For the final three months of the year, the multinational is booked 30% that it said was usual for this time of the year. Reacting to the quarterly update, Goodbody analysts wrote:

These numbers will help push expectations for this year strongly through the €3.0 billion operating profit level.

IAG shares are now up roughly 40% for the year but are still down sharply versus 400 pence right before the start of the COVID pandemic.

IAG did not update its full-year outlook

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The owner of British Airways agreed that demand for summer travel was upbeat. Still, it’s keeping “mindful of wider uncertainties” in the economy, as per CEO Luis Gallego.

To that end, IAG refrained from updating its outlook for the full year on Friday. Previously, it had guided for €2.3 billion in profit that missed consensus estimate of €2.8 billion.  

So far, though, the London-headquartered firm has benefitted from higher fares on the back of strong demand despite inflation and interest rates going up.

Note that peer Ryanair was also cautious this week on demand for the remainder of 2023 as Invezz reported here. Analysts currently have a moderate buy rating on average on shares of IAG.

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