Latam Airlines Group SA, the world’s second-largest carrier by market value, reported second-quarter profit that beat analysts’ estimates in its first financial results since being formed by Lan Airlines SA’s purchase of Tam SA.
Net income rose to $49.7 million from $15.9 million a year ago, according to data posted Aug. 10 on the Chilean securities regulator’s website. Earnings per share of 14 cents surpassed the 5.6-cent average estimate of analysts tracked by Bloomberg.
Earnings benefitted from an increase in passenger traffic in the region and accounting effects of the Tam transaction, which was completed in June. Excluding the effects of the tie-up, profit fell to $5.2 million from $15.9 million a year ago, Latam said in a statement on its website. Operating income reached $23.2 million, resulting in a 1.5 percent operating margin.
“The second quarter presented a challenging environment due to reduced cargo demand and the depreciation of local currencies, especially the Brazilian real,” Latam said. “However, passenger demand in most of Latin America remains solid.”
Latam reported on Aug. 9 a 7.9 percent increase in passenger traffic in July while cargo traffic fell 4.5 percent.
Lan said it completed June 22 the takeover of Brazil’s Tam to create Latam Airlines, the 12th biggest carrier by revenue, according to data compiled by Bloomberg.