Cathay Pacific Airways Ltd., Asia’s biggest international carrier, fell the most in more than two month in Hong Kong trading after reporting first-half profit that missed analyst estimates as cargo revenue dropped.
The stock declined as much as 2.5 percent to HK$13.90, heading for its biggest drop since June 7. Hong Kong’s stock market was closed for trading yesterday.
Cathay’s cargo revenue fell 5.2 percent in the first half as it shipped fewer goods at lower rates while travel within the Asia Pacific region was affected by avian flu and political issues in Northeast Asia, the carrier said. Wall Street job cuts have crimped premium business travel for Asian airlines and Cathay’s Chief Executive John Slosar has cut capacity and phased out some planes to take excess capacity out.
“The cargo market will stay subdued in the third quarter and is unlikely to recover until fourth quarter at the earliest,” Kelvin Lau, an analyst at Daiwa Capital Markets HK Ltd., wrote in a note dated yesterday.
Net income totaled HK$24 million ($3.1 million) in the six months ended in June, Cathay said in a stock exchange statement yesterday, compared with the HK$590 million median profit estimate in a Bloomberg News survey of five analysts. It was the smallest profit in at least 15 years for the Hong Kong-based airline. The carrier had a year-earlier loss.
The company posted about HK$350 million loss in the first half from the newly-opened cargo terminal and also had a loss of HK$50 million a month from its cargo venture with Air China Ltd., Finance Director Martin Murray told reporters yesterday.