What Happened to the Qantas Share Price?
Qantas Airways Limited [ASX: QAN] is an Australian based domestic and international airline with two brands, Qantas and Jetstar.
The Qantas share price closed 6.95% higher on Thursday.
Why Did This Happen to the Qantas Share Price?
The financial end of year results weren’t good. The statutory loss was $2.8 billion and the underlying before tax loss was $646 million – less than the anticipated $750 million from several analyst.
The statutory loss was much higher than expected because of the $2.6 billion write down from the cost of its fleet.
A statutory loss is everything added and deducted from revenue. The underlying before tax loss excludes the really bad stuff, such as write-downs.
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However, the announcement that Qantas was going to separate its loss making international business from the domestic business saw the share price rally 8.9% on the open today.
What Now For Qantas?
Only once in the past five financial years has this stock turned a profit. That was in 2013 with a profit of $1 million.
Alan Joye, CEO of Qantas says these financial results show the bad year is behind the company.
The share price surge means either investors believe or Joye or think all the bad news has been priced in.
Twice this year the Qantas share price has reached $1.40 but it has struggled to trade much higher.
Joye was quick to point out that, while the company estimates a net profit for the first half of 2015, there are factors outside his control that will affect the airlines bottom line. Like the exchange rate and patronage.
Airlines in general are a tricky business to invest in. Qantas’ rally is likely to be short lived. A whiff of bad news could see the share price fall from here.
Shae Smith+
Editor, Money Weekend
The post Why did the Qantas Share Price Rise Today? appeared first on Stock Market News, Finance and Investments | Money Morning Australia.
