Ryanair Holdings plc (NASDAQ:RYAAY) on Monday reported fiscal third-quarter results showing lower year-over-year profit, weighed down by an exceptional regulatory charge, even as revenue rose and passenger traffic increased.
Shares of the low-cost carrier were down in early trading following the earnings release, which showed mixed results relative to analyst expectations.
Regulatory Charge Weighs On Profit
The airline reported fiscal third-quarter profit after tax of 115 million euros (pre-exceptionals), down from 149 million euros in the prior-year quarter. The airline booked an 85 million euros exceptional charge, which it said is a provision for approximately 33% of the Italian AGCM fine that it described as “baseless” and said it expects to be overturned on appeal.
Ryanair Holdings posted third-quarter sales of $3.742 billion, edging past the $3.740 billion analyst estimate, while earnings of 7 cents per share fell short of the 18-cent consensus forecast.
Third-quarter revenue rose 9% to 3.21 billion euros as traffic grew 6% to 47.5 million passengers and load factor held at 92%. The average fare increased by 4% to 44 euros, while revenue per passenger rose by 3%.
Scheduled revenue increased 10% to 2.10 billion euros, and ancillary revenue rose 7% to 1.11 billion euros. Operating costs (pre-exceptional charge) increased 6% to 3.11 billion euros, which the company said was flat per passenger.
Profit after tax (post-exceptionals) was 30 million euros, down from 149 million euros a year earlier. The company also said unit costs were flat, excluding the exceptional charge, and noted that other income dipped in the quarter due to the absence of delivery delay compensation included in the prior-year period.
Balance Sheet And Liquidity Position
Ryanair said gross cash was 2.4 billion euros at Dec. 31 after 1.2 billion euros of debt repayments, 1.4 billion euros of capex, and 0.6 billion euros of shareholder distributions. Net cash was 1 billion euros, and liquidity was further supported by its revolving credit facility, with about 1 billion euros undrawn.
The group said it had 206 B737-8200 “Gamechangers” in its 643 aircraft fleet as of Dec. 31 and expects to receive the final four aircraft by the end of February, enabling 4% traffic growth to 216 million in fiscal 2027.
It said fourth-quarter fiscal 2026 fuel is 84% hedged at $77 per barrel and that it has hedged 80% of fiscal 2027 jet-fuel requirements at about $67 per barrel.
Ryanair said it launched a 750 million euros share buyback in May and, by Dec. 31, had purchased and cancelled over 13.1 million shares, about 46% of the program, at a cost of over 340 million euros. It also said an interim dividend of 0.193 euros per share will be paid in late February.
Outlook
Looking ahead, Ryanair said it now expects fiscal 2026 traffic to grow 4% to almost 208 million passengers and guided fiscal 2026 PAT (pre-exceptional) in a range of 2.13 billion euros to 2.23 billion euros. The company called this guidance cautious.
The company said the projected rise in passenger traffic reflects strong underlying demand and faster-than-anticipated aircraft deliveries from Boeing Company (NYSE:BA). Unit costs remain well controlled, with only modest inflation expected as efficiency gains largely offset higher regulatory and environmental expenses.
Despite the absence of an Easter-related boost in the fourth quarter, fares are tracking ahead of last year, prompting the company to raise its full-year fare growth outlook to 8–9% from a previous forecast of 7%.
Ryanair said the final outcome remains exposed to “adverse external developments” in the fourth quarter, including “conflict escalation in Ukraine and the Mid. East, macro-economic shocks, and any further impact of repeated European ATC strikes & mismanagement.”
In a separate development, CEO Michael O’Leary said a public exchange with Elon Musk drove a near-term bump in attention and demand for the airline. “But we do want to thank him,” O’Leary said, adding that Ryanair received “three or four million hits” for its “great idiots” seat sale, and that the publicity led to a “very significant” surge in bookings, by 2% to 3% over the past five days.
O’Leary said Ryanair has opted not to install Starlink satellite internet across its fleet, citing installation costs and “fuel drag,” which he said would increase the airline’s fuel bill by “100 euros and 200 million euros” annually.
On potential investment, O’Leary said, “We’re a publicly owned company. He’s free to do so at any time,” while noting that “non-European citizens cannot own a majority of European airlines.” He also said Ryanair would be “a very good investment” and “a significantly better investment” than Musk’s “$44 billion acquisition of X.”
RYAAY Price Action: Ryanair shares were down 3.62% at $68.40 during premarket trading on Monday, according to Benzinga Pro data.
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