Ryanair share price down, lifts full-year forecast again but projects lower future growth

Ryanair Holdings Plc boosted its full-year expectations as it reported strong performance in the third quarter driven by more customers and lower fuel expenses.

Net profit for the three months ended December 31st stood at €49 million, a significant improvement over the €35 million loss the discount air carrier reported in the third quarter of 2013.

Revenue climbed 17% to €1.13 billion compared to €964 million a year earlier, while earnings per share stood at €3.53.

The largest budged airline in Europe said it benefited from increased customer numbers during the quarter. Traffic jumped 14% to 20.8 million as average fare rose 2% to €40.

The companys load factor, or the number of passengers compared to capacity, increased 6% to 88% driven by the success of Ryanairs “Always Getting Better” customer program.

Typically, budged air carriers get most of their revenue during the summer, while passenger numbers are smaller during the winter. However, Ryanair said it significantly expanded its winter schedule during the quarter.

“As 2015 will be Ryanair’s 30th year of bringing low fares to Europe, we are pleased to report a Q3 profit,” said Chief Executive Michael O’Leary.

Due to the good quarterly performance the company lifted its full-year guidance and said it expects net profit to range between €840 million and €850 million, up from its previous projection of €810 million to €830 million.

This is the fifth time Ryanair has increased its forecast for the financial year ending March 31, this time boosted by 5% less expenses as the company benefited from lower fuel prices. The company also restated its projection of just over 90 million passengers accompanied with increase in load factors to 87%.

Ryanair said it would launch a €400 million share buy-back program on February 12, citing improved profitability and cash flow. Additionally, the company will start paying the €520 million special dividend it had previously announced on February 27th.

However, the company warned that profit growth in the next financial year would be “modest” because it has hedged its fuel at $92 a barrel for the upcoming fiscal year.

The company also said it could be pressured by rivals which did not hedge and would significantly benefit from lower oil price levels, which are currently at nearly half the price Ryanair hedged at.

Ryanair fell 0.95% on Friday and closed at €10.40 in Dublin. On Monday the stock 3.17% to 10.07 at 09:00 GMT, marking a one-year increase of 59.83%. The company is valued at €14.43 billion.

According to the Financial Times, the 22 analysts offering 12-month price targets for Ryanair have a median target of €10.50, with a high estimate of €12.60 and a low estimate of €7.93. The median estimate represents a 0.96% increase from the last close price.