Virgin Blue shares drop 20 percent on profit projections
Shares in Australian budget airline Virgin Blue fell more than 20 per cent on Monday after the carrier said its year to June net profit would likely be well under that of the previous year.
By Agencies |
SYDNEY: Shares in Australian budget airline Virgin Blue fell more than 20 per cent on Monday after the carrier said its year to June net profit would likely be well under that of the previous year.
Virgin Blue closed down 21.6 percent at 87 cents, trading under 1.00 dollar for the first time.
The low-cost carrier said after the market closed on Friday that its year to June net profit was likely to be no more than 140 million dollars (128 million US) compared with last year's 216 million dollars.
The airline, 62.8 percent owned by Australia's largest freight group Toll Holdings Ltd., blamed higher fuel costs and tougher competition for the expected plunge in earnings.
The news prompted Deutsche Bank to Monday downgrade Virgin Blue Holdings Ltd. to "hold" from "buy."
In a research report, Deutsche Bank said it had slashed its 12-month price target for Virgin Blue stock to 90 Australian cents from 2.30 dollars.
Deutsche Bank has also cut its 12-month price target for Toll to 11.50 dollars from 13.40 dollars after Toll said Friday it had scrapped plans to sell its stake in Virgin Blue because it could not find a buyer.
Toll closed down 15.1 percent at 8.05 dollars.
Virgin Blue closed down 21.6 percent at 87 cents, trading under 1.00 dollar for the first time.
The low-cost carrier said after the market closed on Friday that its year to June net profit was likely to be no more than 140 million dollars (128 million US) compared with last year's 216 million dollars.
The airline, 62.8 percent owned by Australia's largest freight group Toll Holdings Ltd., blamed higher fuel costs and tougher competition for the expected plunge in earnings.
The news prompted Deutsche Bank to Monday downgrade Virgin Blue Holdings Ltd. to "hold" from "buy."
In a research report, Deutsche Bank said it had slashed its 12-month price target for Virgin Blue stock to 90 Australian cents from 2.30 dollars.
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Deutsche Bank has also cut its 12-month price target for Toll to 11.50 dollars from 13.40 dollars after Toll said Friday it had scrapped plans to sell its stake in Virgin Blue because it could not find a buyer.
Toll closed down 15.1 percent at 8.05 dollars.
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