July 15, 2010 / 12:33 PM / 8 years ago

UPDATE 2-GuestLogix profit up; backs market share view

* Q2 EPS flat at C$0.00

* Q2 rev C$6.4 mln vs C$4.6 mln last year

* Says on track for 20-25 pct Asia-Pac market share

* Q2 passenger trips deployed up 55 pct

* Shares rise as much as 12 pct (Recasts; adds analyst comments, details, share movement)

By Arnika Thakur

BANGALORE, July 15 (Reuters) - GuestLogix Inc GXI.TO, which sells onboard retail technology, posted a higher quarterly profit as it deployed its devices in more aircraft, sending its shares up as much as 12 percent.

The company, which serves both airlines and railways, said it was on track to meet its target of a 20 percent to 25 percent airline market share in the Asia-Pacific region by the end of the year.

The company needs to bring on board more big carriers, who have a disproportionate share of the market place, to grow its current market share of 5 percent in the region, said analyst Doug Cooper of Paradigm Capital.

During the quarter, GuestLogix inked contracts with three airlines in the Asia-Pacific region, as well as with Ireland’s Aer Lingus AERL.I and a carrier in Europe, the Middle East and Africa (EMEA).

It also partnered with Hong-Kong based Inflight Sales Group, that supplies inflight retail for airlines like Cathay Pacific Airways (0293.HK).

Revenue for the quarter rose 39 percent to C$6.4 million. Passenger trips under agreement rose 22 percent, while passenger trips deployed increased 55 percent.

“It’s a profitable business and is growing quite rapidly, I think the product they are doing is a big component of the airline growth strategy, the ancillary revenue component,” Cooper said.

American Airlines AMR.N and WestJet Airlines WJAb.TO currently use GuestLogix’s handheld devices, which allow passengers to show tickets and buy food, as well as have access to shopping, bookings and other services.

For the second quarter, GuestLogix posted net income of C$0.05 million ($48,500), or breakeven per share, compared with C$0.03 million, or breakeven per share, a year ago.

Analysts on an average were expecting earnings of 1 Canadian cent a share on revenue of C$6.58 million, according to Thomson Reuters I/B/E/S.

Shares of the company were trading up 13 Canadian cents at C$1.33 in midday trade Thursday on the Toronto Stock Exchange. They touched a high of C$1.34 earlier in the session.

$1=1.031 Canadian Dollar Reporting by Arnika Thakur in Bangalore; Editing by Roshni Menon and Maju Samuel

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