Analysis:This is the third time Ryanair has raised its full-year profit forecast, writes Claire Shoesmith

Ryanair and several brokerages upgraded their full-year earnings forecasts yesterday and the ones that haven't done it yet most likely won't be far behind. As Citigroup so nicely put it: "We have come to expect that Ryanair will almost always exceed its guidance."

Following better than expected third-quarter figures, Ryanair yesterday raised its profit forecast for the year to the end of March (fiscal 2007) by 11 per cent, saying net income will now be €390 million. This anticipated 29 per cent year-on-year gain is the third time the group has raised its full-year forecast.

In November it said profit would be 16 per cent ahead at €350 million, while five months earlier in June it said profit would be up 10 per cent at €330 million. The new forecast equates to earnings per share (EPS) of 50.4 cent.

On the face of things the company looks to be doing everything right except for forecasting its profit, and if the rest of the year continues in this vein, then analysts and investors won't be complaining.

"They were stonking numbers," said one Dublin trader, adding that there will without doubt be a raft of upgrades coming through over the next few days.

NCB and Merrion are already there. Both brokerages said yesterday they will be raising their fiscal 2007 EPS forecasts by 10 per cent to 51 cent and 50 cent respectively. Upgrades for 2008 will follow.

The one area where caution had been expressed was fuel, which now accounts for 40 per cent of Ryanair's total cost base. The fact that 90 per cent of the airline's fuel requirement is currently hedged at $73 a barrel when oil is trading at below $60 has caused some concern.

However, news that this arrangement ends in March and that following that it has hedged 50 per cent of its requirement at $61 a barrel for the first half of fiscal 2008 and 90 per cent at $65 for the second half, was welcomed by analysts.

With this significant cost under control and the expected continued growth in ancillary revenues, it seems that Ryanair will struggle - at least in the short term - to do much wrong.

Whoever you speak to, they seem to agree on one thing at least, and that's that there is more upside to the numbers than there is downside. Analysts, don't get too attached to your forecasts.