Qantas shares slump on lowest first half result in a decade, weak outlook; JAL to be delisted

Qantas’ shares slumped 8.1% yesterday, after falling as much as 9% in intra-day trading, with disappointed investors wiping AUD540 million from the market capitalisation of the carrier amid a heavy day of trading in Sydney, as the carrier scrapped its interim dividend to conserve cash after posting its lowest first-half profit in a decade.

Goldman Sachs reduced its 12-month target price on Qantas from AUD3.66 to AUD3.49/share, but maintained its ‘buy’ recommendation. Goldman Sachs commented, “while we (and the market) are disappointed with the FY2010 earnings guidance, we suspect that the company has been conservative, particularly in terms of its revenue outlook for the 2H of +AUD100 million on 1H (given the anecdotal evidence of yield improvement)”.

RBS also maintained its “buy” recommendation on Qantas stock, with an AUD3.33 target price (down from a previous target of AUD3.35). RBS also broadly maintained its FY2010 PBT forecast at AUD451.8 million (from AUD464.7 million), 13.0% above the top end of management's guidance range. RBS commented, “although outlook commentary and FY10 guidance retained a cautious slant, we retain a positive view on QAN, believing earnings risks lie to the upside”.

See related report: Qantas clawing its way back, but big challenges remain. Cautious outlook, shares plunge

Japan Airlines to be delisted on 20-Feb-2010

Japan Airlines, the first major Asian flag carrier to file for bankruptcy, will be officially delisted on 20-Feb-2010, meaning its last day in Tokyo trading will be today (19-Feb-2010).

Asiana denies reports that it submitted a fundraising plan to creditors

Also in North Asia, Asiana Airlines’ shares gained 4.1%, as the company denied a Maeil Business Newspaper report that it had submitted a KRW1.7 trillion (USD1.5 billion) fundraising plan to creditors.

For all this and more coverage of today's Asia Pacific aviation developments see Asia Pacific Airline Daily.

Asia Pacific selected airlines daily share price movements (% change): 18-Feb-2010