Tui shares fall while the travel agency reveals a fall in profits

Tui has suffered an 18% drop in third quarter earnings

Tui shares fall after the travel agency reveals a fall in profits, since it pays the price for the interruption of the airline

  • Tui has suffered an 18% drop in third quarter earnings
  • Its turnover for the third quarter increased by 5 percent to £ 4.5 billion however
  • Shares fell more than 9 percent to 1434 p after the upgrade

Alex Sebastian for this is money

Tui has suffered an 18 percent drop in third-quarter earnings and warned that summer reserves are unlikely to exceed expectations due to the recent heat wave.

The company saw underlying earnings for the three months through June 30 drop to £ 174 million, with currency fluctuations and the earlier Easter time holding back the numbers.

However, Tui's turnover for the third quarter increased 5 percent to £ 4.5 billion.

Tui has suffered an 18% drop in third quarter earnings

Tui has suffered an 18% drop in third quarter earnings

The shares of the travel company fell more than 9 percent to 1434 p after the update.

Interruptions in airlines that have recently been seen in parts of Europe have cost the business £ 11.7 million during the period, and air traffic control in France is the main culprit.

"Measures are being taken to address our operational resilience in light of this," Tui said.

The company said that summer reserves rose 4 percent, with a high level of early reserves that limit the impact of hot weather. However, the company said that "superior performance is unlikely."

In all its business in the United Kingdom, reserves are ahead of the previous year, but margins have been affected by the weakness of the pound and weather conditions.

Chief Executive Fritz Joussen said it was a "good third quarter," but noted that the travel industry "earns its profits in the fourth quarter."

"We have delivered a profitable operating result after nine months for the second year in a row, and for the full year, we expect to generate double-digit earnings growth for the fourth consecutive time," he added.

Ian Forrest, investment research analyst at The Share Center commented: "There is still good growth in the business, but the fourth quarter will be more important than ever for the company this year because of the potential for long-term growth," he said. Healthy dividend and reduced competition in the sector, we continue to recommend stocks as a & # 39; Buy & # 39; for medium risk investors looking for a mix of growth and income. & # 39;

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