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Investing.com -- EasyJet posted higher third-quarter earnings as increased passenger traffic and stronger revenue lifted results, but shares tumbled 7% on the risk of consensus estimate cuts.
The U.K. low-cost airline reported a headline pretax profit (PBT) of £286 million ($383.3 million), up £50 million from the same period last year, and in line with market expectations.
The rise was supported by a 2.2% increase in passenger numbers to 25.9 million and a favorable timing of Easter, which boosted April’s performance.
Total (EPA:TTEF) revenue rose 10.9% year-on-year to £2.92 billion, with passenger revenue up 9.7% to £1.76 billion. The airline’s load factor edged higher to 90.2%, compared with 90% a year earlier.
EasyJet said it remains on track for solid profit growth in fiscal 2025, though it flagged pressures from higher fuel costs and recent industrial action by French air traffic controllers.
The airline has already sold around 67% of its fourth-quarter capacity. However, it noted that full-year results will depend on the pace of late summer bookings.
It reaffirmed its goal for a minimum pretax profit of £235 million for the year and said it plans to announce a new medium-term target later in 2025.
Jefferies analysts said EasyJet’s Q3 results were broadly in line with their estimates, though they noted the absence of a clear consensus benchmark.
They expect the stock to come under some pressure as consensus for full-year 2025 (FY25) earnings adjusts lower, forecasting it to move to around £665 million—“a c.5.5% cut to consensus”—due to the impact of French air traffic control strikes and rising fuel costs.
The analysts also highlighted that EasyJet raised its second-half fuel CASK guidance to -7% from -8%, indicating “some cost control within Q4 as well.”
“We see a re-rating opportunity as easyJet (LON:EZJ) benefits from a growing package holiday business, fleet renewal and self-help opportunities through optimising winter trading and ancillaries,” Jefferies’ team wrote.
Separately, RBC Capital Markets analysts said they also see a "~5-7% downside risk to FY25E consensus headline PBT."
On a more positive note, the broker added it sees easyJet "as well positioned to exceed expectations in FY26E, given continued fuel tailwinds and scope for an increased contribution from easyJet’s own measures to increase profitability."