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Air Canada Estimates Lifted By CIBC Ahead Of Q1, 'Sector Outperformer' Maintained

 April 30, 2012 12:39 PM


(By Balaseshan) CIBC World Markets Inc. increased its estimates for Air Canada (TSE:AC.B) ahead of the company's first quarter results. The brokerage maintained its "Sector Outperformer" rating and $1.50 price target on shares of Air Canada.

Air Canada is guiding to a stronger-than-expected start to the year with Q1 EBITDAR coming in at $170 million to $180 million. In addition, at the end of Q1, cash and short-term investments amounted to $2.249 billion versus $2.1 billion at the end of 2011. Air Canada reports Q1 on May 4.

Air Canada also noted that the quarter will include charges totaling $120 million relating to Aveos (a non-cash loss on investments of $65 million and $55 million related Aveos' separation program). CIBC has estimated these one -time costs would total about $140 million.

[Related -Pfizer Inc. (PFE) Q2 Earnings Preview: A Penny Here a Penny There]

The brokerage raised its Q1 EBITDA estimate to $80 million from $75 million and its 2012 estimate to $828 million from $753 million. Its 2013 EBITDA estimate is unchanged at $1.141 billion.

CIBC has adjusted estimates to account for Air Canada's guidance. Air Canada has been undertaking a RFP process with respect to longer-term maintenance work previously performed by Aveos with preference given to those that have or will establish some portion of their operation in Montreal, Winnipeg, Vancouver and Toronto.

Air Canada is a domestic, the United States trans-border and international airline and provider of scheduled passenger services in the Canadian market, the Canada-United States trans-border market and in the international market to and from Canada.

AC.B is trading up 3.13% at $0.990 on Monday.

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