Cathay Pacific Airways Ltd. shares tumbled in Hong Kong to the lowest level in more than seven years after Asia?s biggest international carrier scrapped its profit outlook and said it is conducting a “critical review? of its business.
The shares plunged 5.4 percent to HK$10.18 as of 11:45 a.m., headed for the lowest level since June 2009, making Cathay Pacific the worst performer on the MSCI Asia Pacific Index Thursday. The company, which reported an 82 percent slump in net income in the first six months of the year, said in a stock exchange filing Wednesday that the second half ?is no longer expected? to be better.
At least two brokerages cut their ratings on the stock after the outlook warning. Cathay Pacific Chief Executive Officer Ivan Chu has struggled to revive earnings amid a drop in passenger yields — a key measure of profitability in the industry. Singapore Airlines Ltd. has also warned of tougher days as competition with Middle East carriers increases. With Chinese airlines offering more direct services to the U.S. and Europe from the mainland, Cathay Pacific?s Hong Kong hub is no longer so critical for travelers.
