Higher costs impact record sales and disappoint investors
- Singapore Airlines shares fell 9.0% after missing quarterly profit expectations
- Higher costs cut into record sales
- Third-quarter operating profit fell 19% from a year earlier
- Record revenue of over S$5 billion
- Bottom line still rose 4.9% due to lower taxes
- Analysts surprised by rise in fuel and ex-fuel costs
- Buy ratings maintained with target prices of S$7.72 and S$9.17
- Short-term negative reaction expected for shares
Singapore Airlines shares dropped 9.0% in early trading after the carrier’s quarterly results fell short of expectations. The company reported a 19% decline in third-quarter operating profit compared to the previous year, as higher fuel and other costs ate into its record revenue of over S$5 billion. However, the bottom line still managed to rise by 4.9% due to lower taxes. Analysts were surprised by the increase in fuel costs and ex-fuel costs, which came in 15% below consensus expectations. Despite the disappointment, buy ratings were maintained with target prices of S$7.72 and S$9.17. However, analysts warned of a potential short-term negative reaction for the shares.
Factuality Level: 8
Factuality Justification: The article provides a factual account of Singapore Airlines’ quarterly results, including information on the decrease in operating profit, higher costs, record revenue, and analysts’ assessments. The information is presented objectively without sensationalism or bias. There are no significant digressions or irrelevant details, and the overall reporting is clear and concise.
Noise Level: 3
Noise Justification: The article provides relevant information about Singapore Airlines’ quarterly results, including the reasons for the share price fall, the impact of higher costs on profits, and analysts’ ratings and target prices. The article stays on topic and supports its claims with data and quotes from analysts. However, it lacks in-depth analysis of long-term trends or antifragility, and it does not explore the consequences of decisions on stakeholders.
Financial Relevance: Yes
Financial Markets Impacted: Singapore Airlines shares
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article pertains to financial topics as it discusses Singapore Airlines’ quarterly results and its impact on the company’s shares. However, there is no mention of an extreme event.
Public Companies: Singapore Airlines (SGX:C6L)
Key People: Ahmad Maghfur Usman (Analyst at Nomura), Ankur Merchant (Analyst at Nomura)
Reported publicly:
www.marketwatch.com 
