Daily ShareChat: Auckland International Airport

Auckland International Airport's earnings upgrade has led ASB Securities analyst Florian Burch to upgrade his earnings forecasts and his recommendation.

The airport had told the October annual shareholders' meeting it expected to report a net profit between $93 million and $100 million for the year ending June 2010. It now expects to achieve the high end of that range.

Burch says the upgraded forecasts reflect higher than expected passenger numbers, which will mean higher passenger charges and more revenue from the retail and carparking operations, and lower forecast landing fee income.

He is now forecasting a $99.8 million 2010 net profit, up from his previous $95.1 million forecast. He has also raised his 2011 forecast to $115.1 million from $112.7 million previously and his 2012 forecast to $119.2 million from $116.3 million previously.

The airport increased passenger numbers in July, August, September and October. Burch says the worst of the decreases in passenger numbers occurred after the previous comparable four months, "suggesting that, if the current trend continues, growth in the third quarter of 2010 should be quite strong."

Burch says the Commerce Commission's six-month extension of consultation on landing charges gives airports greater opportunity to convince it with their arguments.

BROKER INVESTMENT RATING:   ASB Securities rate Auckland International Airport as outperform (upgraded from marketperform)

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