WestJet ends 2015 with weak Q4 profit, revenue; plans increased share buyback
2015 fourth quarter included a $10.1 million loss on foreign exchange
WestJet Airlines has been hit hard by the dollar's decline, which contributed to a 30 per cent decline in fourth-quarter profit.
The Calgary-based airline says its net income and adjusted earnings were both $63.4 million or 51 cents per share, down by $27.3 million from $90.7 million the fourth quarter of 2014.
WestJet says the 2015 fourth quarter included a $10.1 million loss on foreign exchange, compared with a $2.5 million loss a year earlier.
WestJet' revenue also declined by 3.6 per cent to $958.7 million in the three months ended Dec. 31, down $35.7 million from $994.4 million in the fourth quarter of 2014.
The company didn't provide details on the revenue decline but suggested some of it related to Alberta's recent economic weakness as the oil and gas sector grapples with a dramatic decline in prices since late 2014.
Total operating expenses including fuel, salaries and profit sharing, aircraft leasing and maintenance declined to $846 million, down one per cent from $854.8 million.
The fourth quarter provided a weak ending to an otherwise strong year for WestJet, which saw net income rise by 29.4 per cent in 2015 to $367.5 million. WestJet's adjusted earnings were also $367.5 million, up 15.9 per cent from 2014.
"Today we reported the third best fourth quarter in WestJet's history to complete a record year in 2015," WestJet president and CEO Gregg Saretsky said in a statement.
The company says it will increase its 2015-16 share buyback program to six million shares, up 50 per cent from the previous limit of four million shares.
WestJet has already bought back 3.2 million shares for cancellation since May 13, 2015.
"Notwithstanding the impact that recent economic weakness in Alberta has had on our results, our decision to increase our normal course issuer bid demonstrates our confidence in WestJet's proven business model and the financial strength of our airline," Saretsky said.