Aaron Bunch Journalist with Australian Associated Press | Collection of published work | + 61 484 008 119 | abunch@aap.com.au
Webjet’s earnings forecast disappoints
Webjet shares have tumbled despite the online travel agency forecasting a rise of around 14 per cent in full-year earnings.
November 22, 2017
Shares in Webjet have plummeted after the online travel agency disappointed investors with its forecast of 14 per cent earnings growth.
Webjet said it is on track to deliver earnings of $80 million in the 2017/18 financial year, up from $69.9 million in the prior year.
Managing director John Guscic told the company’s annual general meeting that Webjet’s online consumer travel brands and business-to-business operations were exceeding its target growth rates.
Commsec market analyst Steve Daghlian said Webjet’s earnings guidance was “a little short” of the $89 million the market had expected.
“That’s about an 11 per cent drop on their prior analyst expectations,” Mr Daghlian said.
The company’s earnings guidance includes $5.6 million of impacts from business acquisitions, the introduction of an Australian tax on services from overseas, and additional costs in its hotel agreement with European holiday company Thomas Cook.
Webjet shares dropped $1.37, or 11.6 per cent, to $10.49.
Mr Guscic said Webjet has set a growth target for bookings in its consumer travel brands of more than three times the market rate, and growth of more than five times the market rate in its business-to-business operations.