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.
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.
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