[THE INVESTOR] Korean Air has satisfied market expectations in the second quarter, said Daishin Securities on Aug. 11, maintaining a “buy” recommendation and 42,000 won (US$36.67) target price.
Its second-quarter revenue rose 3.1 percent on-year to 2.91 trillion won and operating profit by 8.5 percent to 172.8 billion won, but net loss reached 203 billion won.
Oil price hike pushed costs up 18 percent and one-off incentives increased wages by 16 percent but the firm still managed to meet earnings prospects, said analyst Lee Ji-yun.
As it enters the peak season in the third quarter, additional demand in Europe and Southeast Asia as well as rise in yield will occur, and despite being a low season for cargo, the yield will still rise at double-digit rate, forecast the analyst.
The fluctuation of oil price remains a variable but its earnings in the latter half will still meet market expectations, added Lee.
By Hwang You-mee (email@example.com)