WestJet reports first quarter net earnings of $37.2 million as it prepares to make its Dreamliner presentation today

WestJet today announced its first quarter results for 2018, with net earnings of $37.2 million, or $0.32 per fully diluted share. While remaining profitable in a challenging quarter, this result compares with net earnings of $46.7 million, or $0.40 per fully diluted share reported in the first quarter of 2017. WestJet achieved its 52nd consecutive quarter of profitability and flew an all-time quarterly record of 6.1 million guests. Based on the trailing twelve months, the airline achieved a return on invested capital of 9.5 per cent, down from to 10.1 per cent in the first quarter of 2017.

“Even though winter 2018 brought many operational challenges, we successfully achieved record load factors and increased revenue by 6.9 per cent on a capacity increase of 4.3 per cent,” Ed Sims, WestJet President and CEO. “I want to thank every individual WestJetter for rising to the challenge through a very difficult operating quarter. Nonetheless, the quarter saw net earnings and margin decline as we continue to invest in the strategy laid out at Investor Day, in a higher fuel environment. We remain laser-focused on strategic execution to ensure we drive shareholder returns.”

Operating highlights (stated in Canadian dollars)

Q1 2018 Q1 2017 Change
Net earnings (millions) $37.2 $46.7 (20.4%)
Diluted earnings per share $0.32 $0.40 (20.0%)
Total revenue (millions) $1,191.7 $1,114.7 6.9%
Operating margin 4.7% 7.1% (2.4 pts.)
ASMs (available seat miles) (billions) 8.029 7.699 4.3%
RPMs (revenue passenger miles) (billions) 6.810 6.393 6.5%
Load factor 84.8% 83.0% 1.8 pts.
Segment guests 6,088,954 5,687,659 7.1%
Yield (revenue per revenue passenger mile) (cents) 17.50 17.44 0.3%
RASM (revenue per available seat mile) (cents) 14.84 14.48 2.5%
CASM (cost per available seat mile) (cents) 14.15 13.45 5.2%
Fuel costs per litre (cents) 73 64 14.1%
CASM, excluding fuel and employee profit share (cents)* 10.57 10.30 2.6%
*Refer to reconciliations in the accompanying tables for further information regarding calculations.

 

Dividend declaration
On May 7, 2018, WestJet’s Board of Directors declared a cash dividend of $0.14 per common voting share and variable voting share for the second quarter of 2018, to be paid on June 29, 2018, to shareholders of record on June 13, 2018. 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.

Image: Boeing. WestJet has a commitment for 10 Boeing 787-9s, with options for 10 more.

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