SIA

SIA: weak 2QFYMar11 results. Credit Suisse notes headline profit above expectations, but operating profit below on weaker passenger yield.
Net profit came in at $194m, -49% yoy, vs Bloomberg consensus of $128.5m. 2Q net profit recovered from 1Q11’s $45m as fuel prices were escalating in that quarter and the Japan earthquake/ tsunami also hit hard in that quarter.
Passenger yield fell 0.8% yoy, while cargo yields continue to remain lackluster with a 5% yoy decline.
Co declared an interim div of 10cts, vs 20cts last yr.
Deutsche says earnings outlook remains clouded by macro uncertainty. Notes the cargo trends have turned negative in the region and this usually precedes passenger trends. Expects premium travel (a significant portion of SIA’s biz) to soften in FY13. Notes even though P/B valuation of 0.9x FY12 is close to the trough in 2008 crisis, continues to see earnings downside risk. Reiterates Hold rating, cuts TP to $10.80 from $13.20.
Citi has a Sell rating with TP $10.40.