WestJet
(TSX: WJA) today announced its 33rd consecutive quarter of
profitability, with record second quarter net earnings of $44.7
million, or $0.34 per diluted share. This compares with the net
earnings of $42.5 million, or $0.31 per diluted share reported in the
second quarter of 2012. These results include $8.4 million of
one-time pre-tax transition costs associated with WestJet's business
transformation initiative. Based on the trailing twelve months, the
airline achieved a return on invested capital of 14.4 per cent, up
from the 14.3 per cent reported in the previous quarter.
"We are pleased with another quarter of record earnings and achieving an ROIC of 14.4 per cent, which for the fourth consecutive quarter surpassed our 12 per cent target," said WestJet President and CEO Gregg Saretsky. "We continue to make good progress with our company-wide business transformation initiative and I want to thank WestJetters for their tremendous dedication to the continued success of our airline."
In
the second quarter, WestJet successfully launched WestJet Encore,
Canada's newest regional airline with its first two new Bombardier
Q400 NextGen aircraft. WestJet's new regional airline will provide
more Canadians with access to WestJet's low fares and caring guest
experience, while enhancing the airline's value to the business
market. "We are pleased with initial results in both the local
market and the significant connecting traffic flows from the new
regional service," said Gregg Saretsky."We are pleased with another quarter of record earnings and achieving an ROIC of 14.4 per cent, which for the fourth consecutive quarter surpassed our 12 per cent target," said WestJet President and CEO Gregg Saretsky. "We continue to make good progress with our company-wide business transformation initiative and I want to thank WestJetters for their tremendous dedication to the continued success of our airline."
WestJet expects to continue its strong traffic and revenue growth in the third quarter of 2013. The airline anticipates its 2013 third quarter RASM, as compared to the same period in the prior year, to experience a similar level of year-over-year percentage decline as the second quarter of 2013, primarily as a result of increased capacity associated with higher utilization, the reconfiguration of WestJet's Boeing 737-800 fleet, and the ramping up of WestJet Encore. June and July traffic experienced some booking weakness due to the impact of flooding in Calgary and the surrounding communities.
The airline expects jet fuel costs to range between 90 and 92 cents per litre for the third quarter of 2013, representing a flat to up two per cent year-over-year increase. In terms of CASM, excluding fuel and employee profit share, WestJet expects it to be down 0.5 to down 1.5 per cent in the third quarter of 2013.
For the full year 2013, the airline now expects CASM, excluding fuel and employee profit share, to be down 0.5 to down 1.0 per cent year-over-year primarily as a result of cost reductions achieved and anticipated through its previously announced company-wide business transformation initiative.
For the full-year 2014, the airline anticipates system-wide capacity growth between four and six per cent. "The flexibility we have built into our fleet plan through lease renewal options and our ability to deploy a mix of Boeing 737 and Bombardier Q400 aircraft allows us to tailor capacity and continue our profitable growth while aligning with market conditions," noted Gregg Saretsky.
Dividend declaration
On July 29, 2013, WestJet's Board of Directors declared a cash dividend of $0.10 per common voting share and variable voting share for the third quarter of 2013, to be paid on September 30, 2013, to shareholders of record on September 18, 2013. All dividends paid by WestJet are, pursuant to subsection 89(14) of the Income Tax Act, designated as eligible dividends, unless indicated otherwise. An eligible dividend paid to a Canadian resident is entitled to the enhanced dividend tax credit.
