Ryanair shares tumble after surprise profit warning
Shares in airline Ryanair tumbled to their lowest levels in two years this morning after the company issued a surprise profit warning.
Full year profit is more likely to be at the lower end of the €570m and €600m, the airline said today in a statement sending the shares down 14pc to €5.82.
Ryanair said that if yields, a measure of fare prices, continued to weaken profit may be “at or slightly below the lower end of this range,” the statement said.
“In recent weeks we have noticed a perceptible dip in forward fares and yields into September, October and November,” Michael O'Leary said in a statement.
He also cited a weaker exchange rate and increased price competition as well as economic conditions in Europe.
“The stock and sector will likely sell off heavily on the back of this news” said Dublin stockbrokers Goodbody. “This is a surprise statement from Ryanair and comes contrary to some of the commentary from the peer group and indeed Ryanair’s own commentary at its June investor days”. It said price competition was probably coming from airlines like Norwegian, Aer Lingus and IAG (Iberia and Vueling).
However, Ryanair also reiterated the strength of its balance sheet and added there will be no change to its planned buybacks and dividends for 2014 and 2015.