EasyJet profit slides on Iran war impact
EasyJet's third-quarter profit slumped 70% as the Iran war led to volatile fuel prices and made travelers wary, though earnings beat analysts' estimates and the carrier indicated somewhat clearer skies heading into peak summer.
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Video Summary
AI GeneratedEasyJet reported a 70% drop in third-quarter profit to $113.8 million, primarily due to rising fuel costs and geopolitical instability. Despite the decline, shares rose 6% as earnings exceeded analyst expectations and demand increases for the summer peak, while the company remains a focal point of takeover interest from Apollo and Castle Lake.
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EasyJet said third-quarter profit dropped 70% on Thursday,
but its shares jumped 6% in early trade.
Here's what's happening.
The budget airline reported a $113.8 million profit for the three months to the end of June.
The takeover target said the Iran war drove fuel costs up by $140 million,
and made travellers wary.
But earnings beat estimates from JP Morgan and RBC analysts.
Thursday's 6% stock jump clawed back from a 12% slump the day before.
That drop followed a Reuters report that the European Union may tighten airline ownership
rules. The change could complicate rival takeover bids from US firms Apollo and Castle Lake.
EasyJet's board has backed Apollo's roughly $7.6 billion offer over Castle Lake's lower bid.
Apollo has until August 7th to make a firm offer,
while Castle Lake's deadline is August 3rd.
EasyJet's shares are up by roughly a fifth this year, boosted by the takeover interest.
And the airline says demand is picking up, heading into peak summer.