WestJet reports third quarter net earnings of $71 million, up 80 per cent

CALGARY, Nov. 7, 2012 /CNW/ – WestJet (TSX: WJA) today announced third quarter net earnings of $70.6 million, or $0.52 per diluted share; up from the net earnings of $39.3 million, or $0.28 per diluted share, reported in the third quarter of 2011. These financial results mark WestJet’s 30th consecutive quarter of profitability. Based on the trailing twelve months, the airline achieved a return on invested capital of 12.7 per cent, up from the 11.4 per cent reported last quarter.

“It was another great quarter for WestJet with significant earnings growth and continued margin expansion. We are also pleased to report a 12.7 per cent return on invested capital which surpasses our 12 per cent target,” said WestJet President and CEO Gregg Saretsky. “This quarter, we achieved our highest ever quarterly load factor and I thank WestJetters for taking care of this record number of guests and contributing to these strong financial results.”

WestJet expects that RASM growth will continue in the fourth quarter at a slightly moderated pace compared to the 2012 year-to-date growth. “Our forward bookings indicate that demand for air travel remains healthy as we head into the winter season. We expect operating margin expansion in the fourth quarter and continued profitable growth into 2013,” commented Gregg Saretsky.

The airline anticipates that fuel costs per litre will range between $0.91 and $0.93 in the fourth quarter of 2012. WestJet expects the increase in the fourth quarter CASM, excluding fuel and profit share, will be in line with the year-over-year increase reported in the third quarter of 2012. The projected full-year 2012 CASM, excluding fuel and profit share, remains unchanged from the previous estimate of an increase between three to 3.5 per cent.

WestJet recently announced that the name of its low-cost regional airline will be WestJet Encore and Calgary has been selected as the head office location for the new airline. The launch of WestJet Encore remains on track for the second half of 2013. The initial flight schedule is expected to be released in early 2013 which will include the first group of new communities the new airline plans to serve.

“Our strong brand epitomizes the very principles upon which WestJet was founded. This includes a low-cost focus and a caring guest experience which will be embodied in WestJet Encore,” noted Gregg Saretsky. “We are excited to bring even more Canadians access to lower fares, stimulate demand for air travel in smaller communities and repeat our success in the regional space.”

Dividend declaration
On November 6, 2012 WestJet’s Board of Directors declared a cash dividend of $0.08 per common voting share and variable voting share for the fourth quarter of 2012, to be paid on December 31, 2012, to shareholders of record on December 12, 2012. All dividends paid by WestJet are, pursuant to subsection 89(14) of the Income Tax Act, designated as eligible dividends, unless indicated otherwise. An eligible dividend paid to a Canadian resident is entitled to the enhanced dividend tax credit.