Norwegian Soars to Record on Better Earnings Outlook: Oslo Mover

Norwegian Air Shuttle AS rose to the highest level in almost 10 years in Oslo after Europe’s fourth-biggest discount carrier narrowed its loss and as U.S. approval for Boeing Co.’s Dreamliner battery helped its outlook.

Norwegian gained as much as 7.6 percent to 272 kroner, the highest intraday level since the company started trading its shares in Oslo on Dec. 18, 2003. The stock traded 5.8 percent higher as of 2 p.m. with about 2.6 million shares having been traded, more than seven times the average daily volume during the last three months.

The Scandinavian carrier on April 18 reported a first quarter loss of 117.2 million kroner ($20.1 million), narrowing from 285.5 million kroner a year earlier and beating the 233.4 million-kroner loss that was expected, according to the average of seven analyst estimates compiled by Bloomberg.

The better-than-expected start to the year and positive news about the Dreamliner, of which Norwegian has ordered eight, suggest the carrier will report strong sales during the next two quarters, according to Kenneth Sivertsen, an analyst at Arctic Securities ASA.

“The first quarter is always the tricky quarter for an airline,” he said by phone from Oslo today. The Fornebu, Norway-based company is likely to use its first 787 on short-haul European routes before placing the jet on the long-haul routes it’s designed for, he said.

Norwegian is scheduled to introduce three 787s this year, four next year and the eighth in 2015, with five leased and three bought outright.

Finnair Sale

“Norwegian should have a fairly good couple of quarters,” Sivertsen said.

Finnair Oyj’s 53 million-euro ($69.1 million) sale of its 4.7 percent stake in Norwegian may also be helping drive the airline’s stock today, since the holding had “created some overhang in the share price,” the analyst said.

Vantaa, Finland-based Finnair will record a capital gain of 34 million euros from the transaction, it said today. The shares were transferred in 2007 in connection with Norwegian’s purchase of Swedish unit FlyNordic via a stock-swap.

Shares in Norwegian have gained 87 percent this year, valuing the airline at 9.35 billion kroner.

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