Ryanair today posted an above-forecast 21-per cent rise in first-quarter earnings but its shares fell on concerns about its possible exposure to high oil prices.
The carrier, which has been slashing ticket prices to fill seats amid cut-throat competition, said adjusted earnings, which excluded around €3.3 million in non-recurring costs, rose to 7 cents a share in the three months to end-June, from 5.8 cents in the same period last year.
The average forecast in a Reuters survey of Dublin-based analysts was 6.65 cents.
However Ryanair shares dipped 2.5 per cent to €4.3 in early trade on what dealers said was investor concerns that the airline was only hedged on oil prices until the end of the second quarter.
"They only have hedging in place until September/October and prices are up again - oil price fears are hitting any and all of this kind of stock," one trader said.
In its results statement Ryanair said it believed oil prices would fall over the medium term and it would be unwise therefore to lock in at the current high rates.
It added it would offset higher oil prices with cost savings elsewhere.
The company, which reported adjusted after-tax profits also up 21 per cent at €53.1 million and total revenues 23 per cent higher at €302.8 million, stuck with its prediction of a winter fares war which would cause an industry shake-out.
Deputy chief executive Mr Michael Cawley said there were already signs confirming that the "bloodbath" predicted by Ryanair earlier this year would occur in the winter as budget airlines fought for business by chopping fares.
But he said he was confident Ryanair would emerge "stronger, unscathed and in pole position" from any such battle.
Mr Cawley said he was pleased the first-quarter results were in line with what the airline had predicted for itself but a six per cent decline in yield - essentially the average fare - was never going to be a cause for celebration.
"The winter is not upon us yet and it's going to be the period of most yield attrition, so we have to watch that," he said in an interview.
He said summer volume bookings were "reasonably good" so far, with the airline's two new bases at Rome Ciampino and Barcelona Girona doing particularly well.
"They're a key indicator of how the overall is going but yields are still the issue."
Ryanair makes around half of its annual profit in its second quarter ending September 30th.