The airline reduced its full year expectations on back of disruptions, currency movements and impact of terrorism
As easyJet updates the market, Graham Spooner, investment research analyst at The Share Centre, explains what it means for investors:
"Shares in British airline easyJet were down 7% in early morning trading as the company warned that profits will be lower as a result of disruptions, currency movements and the impact of terrorism due to its higher exposure to security-hit destinations .
"Subsequently, the company reduced its full year expectations for profits and it is now in the range of £490m to £495m. Interested investors should note that as a result of the fall this morning, the share price is now at a three year low.
"In regards to other numbers reported by the group this morning, revenue per seat for the first quarter was lower year on year. Passenger numbers are however at record levels, 22 million in the three months to the end of September, with a solid load factor of 93.9%. The group was also keen to inform investors that around 45% of seats have been sold for the first quarter.
"The company's Chief Executive Carolyn McCall today described the current environment as tough for all airlines however, she reassured investors that the easyJet's 'cost control and revenue initiatives as well as its strong balance sheet underpin their confidence in the business.'
"We continue to recommend easyJet as a 'hold' for medium risk investors. It should be noted that the airline sector is a very competitive one and the extra capacity may prove to be a burden if passenger growth declines. For those interested in the sector, our preference is TUI due to the long term growth potential and the healthy dividend."