Air China Limited (HKG:753) Earnings: Did It Outperform The Industry?
Examining Air China Limited’s (SEHK:753) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess 753’s latest performance announced on 30 September 2017 and compare these figures to its longer term trend and industry movements. See our latest analysis for Air China
How Did 753’s Recent Performance Stack Up Against Its Past?
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to assess different companies on a similar basis, using the latest information. For Air China, its most recent earnings (trailing twelve month) is CN¥7,865.8M, which, relative to the prior year’s level, Since these figures are fairly short-term thinking, I’ve calculated an annualized five-year value for Air China’s net income, which stands at CN¥6,126.4M. This suggests that, generally, Air China has been able to improve its earnings over the last couple of years.
How has it been able to do this? Let’s take a look at whether it is solely due to an industry uplift, or if Air China has experienced some company-specific growth. Over the past couple of years, Air China top-line expansion has outpaced earnings and the growth rate of expenses. Though this has led to a margin contraction, it has moderated Air China’s earnings contraction. Eyeballing growth from a sector-level, the HK airlines industry has been relatively flat in terms of earnings growth over the prior twelve months, evening out from a solid 14.92% over the past half a decade. This suggests that whatever near-term headwind the industry is experiencing, Air China is relatively better-cushioned than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Air China gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Air China to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for 753’s future growth? Take a look at our free research report of analyst consensus for 753’s outlook.
2. Financial Health: Is 753’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
