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Lufthansa soars on new hope
FRANKFURT, Germany -- Deutsche Lufthansa soared more than 9 percent after the chief financial officer of Europe's second-largest airline indicated the group would beat its profit target for the year. Its stocks rose 81 euro cents to 9.57 euros in Friday morning trading in Frankfurt. But the stocks are still down more than 50 percent on the March year high of 19.79 euros amid a crisis of confidence in the sector and financial markets woes. But the airline that was forced to ground 43 aircraft after the September 11 terror attacks has been bullish about its performance as many carriers in Europe see a patchy recovery in passenger traffic and finances. Chief Financial Officer Karl-Ludwig Kley said in an interview in German newspaper Sueddeutsche Zietung the airline would post a nine-month net income and saw its current full-year operating profit target was conservative. The airline reiterated in August that it expects to make an operating profit of least 500 million euros in 2002, up from the previous estimate of 400 million euros. But analysts had said that target would be easy to beat. "We are very satisfied with the development up to now. Perhaps our forecast was indeed very conservative," Kley said. The company told Reuters the airline would naturally post a full-year net income as well. Nine-month numbers are due to be released on November 6, the company said. In the first six moths of this year, the German airline made a loss of 27 million euros on sales 8.2 billion euros. First-half operating profit came with its 2002 target at 320 million euros. The airlines stock also received a boost from investment bank Goldman Sachs, who upgraded the company's shares to "market outperform" from "market perform," saying that in the worst case scenario of a U.S.-led war with Iraq, Lufthansa would beat it rivals. "Lufthansa has the strongest balance sheet and has managed its cost base and cash flow well in the past 12 months," analysts at Goldman Sachs wrote in a note to investors. "We believe balance sheet strength means it will outperform its peers in a crisis. As the 'last manstanding' it may benefit disproportionately from industry restructuring."
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