Investing.com -- Ireland-listed shares in Ryanair (IR:RYA) dipped marginally in early European trading on Monday after the budget carrier flagged that airfares were not climbing as fast as initially expected heading into the all-important summer travel season.
Yet Ryanair still reported a 34% jump in full-year post-tax profit -- its preferred measure of income -- to 1.92 billion euros despite facing a steep rise in jet fuel costs. The result topped company-compiled analyst estimates of 1.905 billion euros cited by Reuters, thanks in large part to a record 184 million passengers flying with the company in the fiscal year ended on March 31.
However, the company said it was only "cautiously optimistic" that fares this summer would be "flat to modestly ahead" of last year, an outlook that Chief Executive Michael O'Leary told investors could be linked to a "recessionary feel around Europe."
He added that if prices had to be cut to fill a load factor -- the percentage of available seat capacity on a plane -- of 94% in April, May and June "then so be it."
The firm decided against giving profit forecasts for the current year, saying that it was "heavily dependent" upon avoiding adverse events such as the wars in Ukraine and the Middle East, extensive air traffic control disruptions or further delivery delays from jetmaker Boeing (NYSE:BA).
Analysts at Stifel noted that the commentary was "in line" with recent statements from peers like easyJet (LON:EZJ), saying that any yield increase this summer "would still be a solid outcome, as it comes on very tough [year-on-year] comparables with last summer."
Meanwhile, Ryanair said that its balance sheet remains "strong," with net cash at the end of the year standing at an above-consensus mark of 1.37 billion euros. The group subsequently announced that its board had approved a 700 million euros share buyback, which is due be formally launched later this week.
In a note to clients, analysts at RBC Capital Markets said that Ryanair's surplus cash position grants it "capital allocation optionality." They argued as well that they "see scope" for Ryanair to outperform its European rivals, citing "margin and cost leadership" and "stronger recent fare momentum" than its peers.