Skip to main content

IAG (ICAGY) shares rose sharply Friday after the British Airways owner beat expectations for second-quarter revenue and operating profit, rounding off what was a solid first-half for the airline group.

Second-quarter revenue came in at €5.9 billion ($6.9 billion), up 4.3% on the same period one year ago and ahead of the FactSet consensus for a top line of €5.7 billion. Operating profit of €805 million was some 23% ahead of analyst forecasts for a result of €653 million.

Shares of IAG rose more than 3.5% during early trading to change hands at an intraday high of 614.0 pence before paring gains, extending their year to date gain to more than 36% amid broad weakness across the European airline sector.

Shares were 0.93% up at 9:19 BST, changing hands at 599.5 pence. 

"We're reporting a very strong performance in quarter 2 with an operating profit of €805 million before exceptional items which is up from €555 million last year. The underlying trend in unit revenue improved, benefiting partially from Easter and a weak base last year," said CEO Willie Walsh.

Scroll to Continue

TheStreet Recommends

The airline told investors that full year operating profit is expected to show a double digit improvement on 2016 and second half unit revenues are expected to show an increase on last year.

Friday's solid set of results came despite a power outage that grounded all British Airways flights into and out of U.K. airports Gatwick and Heathrow in June, which was expected to result in the airline taking around €150 million in one-off charges.

Thousands of flights were delayed over the course of one weekend however, British Airways operating profit rose 39% to €975 million during the first half. It reported additional charges of €68 million related to the power outage on Friday.

"Non-fuel unit costs before exceptional items are up, at constant currency. These costs include the financial impact of the power failure which affected British Airways' customers," said Walsh. 

More of What's Trending on TheStreet: