Which Stock Saw its 4th-Quarter Results Soar?

Transat AT Inc. (TSX:TRZ) is flying high with its fourth-quarter earnings results. How high? Read on to find out.

| More on:
The Motley Fool

When you think of Canadian airlines, your thoughts probably go to our two big players: Air Canada (TSX:AC)(TSX:AC.B) and WestJet Airlines Ltd. (TSX:WJA). (Fool contributor Joey Frenette just wrote a comparison on what to expect from each of the main players in 2018 that’s worth a read.)

But it’s a smaller industry player that just posted great fourth-quarter results: Transat AT Inc. (TSX:TRZ). How good? Let’s take a look.

Fourth-quarter 2017 results

Transat is a late reporter, with fourth-quarter results coming in on December 14. Transat focuses on holiday travel and the tourism market. This focus makes it a smaller player in the Canadian airline industry. The stock’s market cap sits at $381 million.

For its final quarter of the year, Transat reported revenue of $698.6 million — an increase from $612 million in the 2016’s fourth quarter. Analysts were expecting a number closer to $662 million, so the results beat market expectations — always a nice thing to see. Net income attributable to shareholders came in at $148.1 million, dwarfing last year’s $34.9 million result.

For the year, revenues came in at $3 billion — just above 2016’s $2.9 billion. Operating income for the year was $34.7 million, which is up from a loss of $30.3 million in 2016.

In terms of highlights for the year, the company increased its offerings in the transatlantic marker by almost 8%. Total travelers for the year were up 8.2%. The company closed its sale of Ocean Hotels in October and completed the sale of subsidiary Jonview Canada to a Japanese multinational at the end of November. The company also entered a lease for 10 Airbus planes that should be operational in 2019 and extended other Airbus leases under better conditions.

What to expect in 2018

Looking ahead to 2018, the company says winter bookings are up by 9.2% so far, and operating expenses are down slightly at 2%. Many things can affect the bottom line, such as weather and the strength of the Canadian dollar, but things look good for the stock at the moment.

Investor takeaway

We’ve reported other good news for the stock earlier this year, so it seems to be on a good trend. The stock price has mostly moved higher over the last year, so people are seeing value in this stock. If you are thinking of investing, keep an eye on how Transat fares in the busy winter holiday months.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Susan Portelance has no position in any stocks mentioned.  

More on Investing

An investor uses a tablet
Stocks for Beginners

If I Could Only Buy 2 Stocks in the Last Half of 2024, I’d Pick These

I’m looking to buy two stocks over the next month. Here’s a look at my picks and why you should…

Read more »

gift is bigger than the other
Investing

Millennials: 1 Growth Stock Set to Shine in 2025

Shopify (TSX:SHOP) stock could be worth betting on as it goes for growth in the new year!

Read more »

up arrow on wooden blocks
Stock Market

2 Stocks I’ll Be Adding to My RRSP — Even With the TSX at All-Time Highs

Calian Group and Pan American Silver are two TSX stocks trading at an attractive multiple that can generate market-beating returns…

Read more »

dividends can compound over time
Investing

Here Are My Top 2 TSX Stocks to Buy Right Now

Shares of these fundamentally strong TSX companies have significant room for further growth, making them compelling investments right now.

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

Is Brookfield Infrastructure Partners a Buy for its 4.75% Yield?

Brookfield Infrastructure Partners (BIP) has a 4.75% dividend yield. Is it worth it?

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Monday, November 4

In addition to the ongoing corporate earnings season, the U.S. presidential election and the Federal Reserve’s interest rate decision could…

Read more »

calculate and analyze stock
Investing

2 Top Value Stocks I’d Happily Scoop Up in November

Here are two top value stocks I'm seriously considering adding this month. They are likely to continue to accumulate over…

Read more »

A data center engineer works on a laptop at a server farm.
Tech Stocks

3 No-Brainer Data Centre Stocks to Buy With $500 Right Now

Data centres are going to be a huge growth opportunity in the next decade. And these are the top buys.

Read more »