Virgin Blue Estimates Annual Loss; David Jones Net Up 5%

Marcus Jacob
23 Mar, 2011
New York City

Australian stocks traded in the positive zone but failed to make a significant advance. Virgin Blue issued its fourth earnings warning in a year and estimated full year loss of as much as $80 million. David Jones said first half net increased 5.2% on flat sales but left the outlook unchanged.

[R]5:00 PM Sydney – Australian stocks traded in the positive zone all day but failed to make significant advances. Virgin Blue issued its fourth earnings warning in a year and estimated full year loss of as much as $80 million. David Jones said first half net increased 5.2% on flat sales but left the outlook unchanged.[/R]

The ASX 200 index increased 9 to 4,652.40 and the All Ordinaries index gained 8.8 to 4,746.50.

The Australian dollar closed up to $1.008 and crude oil increased $2.17 to $104.51 a barrel.

Virgin Blue Estimates Annual Loss

Virgin Blue estimated loss in the current fiscal year after issuing its fourth earnings warning in a year.

The regional airline cited a sharp increase in fuel cost, impact of earthquake in New Zealand and higher interest rate all contributing the estimated pre-tax loss between $30 million and $80 in the current fiscal year.

The airline reported last fiscal year pre-tax net income of $34.3 million and first half profit of $37 million. However, since its last warning on February 23, the fuel cost has jumped and a number of global events have dampened the travelers’ mood.

The company said the additional rise in fuel price is expected contribute $50 million in costs and Christchurch quake is expected to impact $15 million in business.

David Jones Earnings Net Up 5.2%

Luxury retailer David Jones said first-half net increased 5.2% to $105.7 million and left its full-year earnings outlook of an increase between 5% and 10%.

Revenues in the period decreased 0.2% to $1.08 billion.

The company also declared interim dividend of 13 cents, an increase of 1 cents from a year ago period.

Stock Movers

Virgin Blue Holdings dropped 2 cents to 31 cents after it issued its fourth earnings warnings in a year. The regional airline now said it expects current year pre-tax loss to range between $30 million and $80 million.

Qantas closed unchanged at $2.09.

David Jones soared 10 cents to $4.60 after the luxury retailer reported higher profit on flat sales and left its earnings outlook unchanged.

Resource stocks were after oil, natural gas and metals prices rose. BHP Billiton closed unchanged at $44.20 and Rio Tinto increased 13 cents to $80.68.

Newcrest Mining increased 5 cents to $37.07 and gold prices in Sydney closed up US$1.81 to US$1,427.30.

Banks generally closed higher. Commonwealth Bank increased 39 cents to $51.33 and National Australia Bank edged up 0.2%.

Woolworth declined 7 cents to $25.80 and Wesfarmers dropped 8 cents to $31.07.

Foster’s Group increased 1 cent to $5.52 and the beer maker said it halted its shipments to Coles and Woolworths and cited two retailers were its selling products below cost.