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Transat rises as Q3 revenue increases 1.6%

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Transat A.T. (TSE:TRZ.B) rose in morning trades after Canada’s largest tour operator reported a 1.6 percent increase in revenue its fiscal third quarter.

Shares rose 1.8 percent to C$9.00 at 9:36 a.m. in Toronto, paring this year’s loss to 29 percent.

Net income fell to $25.8 million, or $0.66 per share, in the three months ended July 31, from $41.1 million, or $1.07 per share, in the year-earlier period, the Montreal, Quebec-based company said in a statement today.

The company said that the result is largely attributable to the impact of fuel-hedging accounting during 2013. 

Third-quarter revenue increased to $941.7 million from $927 million year-over-year.

"In spite of the increase of more than 10% in the overall capacity on the Transatlantic market, these are among the best third-quarter results we've ever posted," Jean-Marc Eustache, Transat's chief executive officer, said.

"In the entire history of the company, we've done better on only two occasions, including last year, which was a record. So we're talking about a very satisfying start to the season."

Looking ahead, the company said it expects to record satisfactory results in the fourth quarter, though lower than the record results posted last year.

For the period of August to October, Transat said that its capacity on the Transatlantic market outbound from Canada and Europe is similar to that for summer. To date, 86 percent of that capacity has been sold. Load factors are 1.5 percent lower and selling prices of bookings taken are 1.0 percent higher compared with the same date last year.

The weak Canadian dollar, net of the variance in fuel costs, will result in an increase in operational expenses of 3.8 percent assuming that the dollar and the cost of fuel remain at their current levels, the company said.

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TSX:TRZ.B
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