Lufthansa (DLAKY)  fell to the foot of the market in Germany Thursday after a cautious tone from management led investors to overlook what was otherwise a solid set of first-quarter numbers from the flagship carrier.

Lufthansa reported revenue of €7.69 billion ($8.3 billion) for the period, an 11.2% increase on the year and ahead of the Factset (FDS - Get Report) consensus for a top line of €7.39 billion.

At the bottom line, Lufthansa reported adjusted operating profit of €25 million, up from a net loss of €53 million one year ago, representing what the group said is its best result since 2008. On a reported basis, the German airline reported a net loss of €68 million, which was in line with analyst estimates.

However, management guidance for the year ahead left investors uninspired, with the board sounding disappointed with its progress on tackling costs and warning of poor visibility over passenger demand later in the year.

Lufthansa shares fell by more than 2% in early European trading, to change hands at €16.35, before paring losses to around €16.57. Thursday's price action for Lufthansa stock came in stark contrast to the 0.40% gain of the Stoxx Europe 600 TMI Airlines index.

"At our airlines we are seeing positive developments in the pricing environment and significantly higher traffic revenues. At the same time, however, we cannot be satisfied with the cost development of our airlines," said CFO Ulrik Svensson.

Svenson also said that full year guidance remains unchanged as the board does not yet have sufficient visibility on bookings for the third quarter, which is traditionally the busiest period for the industry.

Thursday's numbers came closely on the heels of a strong performance from Lufthansa and other airline stocks, with investor sentiment toward the sector having warmed in recent months on the back of improved load factors across the industry.

Lufthansa stock is up more than 30% for the year to date although it remains to be seen how long it can remain in the air.

Out of the 23 analysts recorded by Factset as covering the stock, some 13 of them have sell ratings attached to the stock, while only two rate it as a buy.