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Investing.com -- Deutsche Lufthansa (ETR:LHAG) reported a strong rise in second-quarter earnings that beat analyst expectations, driven in part by continued demand for maintenance and repair services through its Lufthansa Technik unit.
The carrier’s shares rose around 1% in Frankfurt trading.
Net profit rose to €1.01 billion ($1.15 billion), more than double the €469 million recorded in the same period last year.
"Banking the net income beat implies a 34% full-year consensus upgrade," Jefferies analyst Jaina Mistry said in a note.
Operating profit climbed 27% to €871 million, beating the analyst consensus of €805 million.
Revenue rose 3% year-on-year to €10.32 billion, missing the company-compiled consensus of €10.75 billion.
“Although the second quarter was again marked by geopolitical crises and economic uncertainties, we are today confirming our positive outlook for the full year,” Chief Executive Carsten Spohr said in a statement.
The company said the profit increase was supported by favorable tax and currency effects, along with lower oil prices and the contribution from its investment in ITA Airways.
Lufthansa Technik reported an 8% rise in revenue as strong air travel demand fueled the need for maintenance services. Despite challenges such as material shortages and increased U.S. tariffs, the business delivered a record result in the first half of the year, although expenses rose by 10%.
The group said bookings from the U.S. remained strong even as the dollar weakened, and it plans to expand further on transatlantic routes. However, a trend toward shorter booking windows has limited forward visibility for the second half.
Lufthansa reaffirmed its full-year guidance and updated its fuel cost outlook to €7.16 billion, down from a previous estimate of €7.27 billion and 5.5% lower year-on-year. Visible Alpha consensus had projected €7.4 billion.
The revised fuel guide "mechanically drives 10% adjusted EBIT and 16% net income upgrades, all else equal," Mistry said.