Australia’s national airline has been rocked by lockdowns recently.
The post All eyes on Qantas (ASX:QAN) shares this reporting season appeared first on The Motley Fool Australia. –
The Qantas Airways Limited (ASX: QAN) share price will be on watch this reporting season.
In an article published in the AFR, Australia’s largest airliner ranks amongst the top 5 companies to watch this August.
Here’s why all eyes will be on the Qantas share price this profit season.
Why will investors be watching the Qantas share price?
Going into this reporting season, Australia’s domestic economy has been rocked by widespread lockdowns.
As a result, many investors will not only be looking at how companies have performed but also what the future holds for them.
According to the article published in the AFR, Qantas will be amongst the most scrutinised companies this earnings season.
Despite the airliner building optimism over the past 12 months, the delta outbreak has cast serious doubts on the future of Australia’s domestic travel market.
The article highlighted Qantas’ decision to stand down 2500 workers last week as a reflection of the crisis.
So, according to the article, investors will be watching a couple of things when Qantas reports its earnings.
Firstly, how badly the damage of the lockdown has been.
Secondly, investors will be interested to know how an extended lockdown might impact the airliner’s future profits
According to the article, analysts from noted broker Citi have already published their expectations.
Analysts are expecting the airliner to report a loss of $1.2 billion for the 12 months to June 30.
In addition, the broker has forecasted that Qantas could generate a profit of $213 million in 2021-2022.
Citi’s analysts estimate that Sydney accounts for 35% to 40% of Australia’s aviation activity.
As a result, investors will be paying attention to how an extended lockdown for Greater Sydney would impact the airliners future profits.
More on Qantas
The last 3 months have not been kind to Qantas.
Shares in the airline have struggled following a plethora of COVID-19 induced travel restrictions and lockdowns.
The seriousness of the dire situation was recently displayed after the airliner stood down 2,500 crew.
The stand-downs follow a drastic reduction in the Qantas’ domestic capacity, with more than 9000 flights cancelled in June.
Despite an initial recovery earlier this year, the Qantas share price is trading more than 5% lower since the start of 2021.
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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.