Lufthansa posts 2Q profit

Lufthansa, Germany's number one airline, posted a sharp drop in second-quarter net profits Thursday but stuck to its cautious outlook for the year. The group reported a net profit of 229 million euros ($281 million) for April to June, a nearly 24-percent fall on the same period a year earlier, but the result exceeded analysts' forecasts. Analysts' predictions for net profit averaged 124 million euros, according to a poll by Dow Jones Newswires. "The group is still forecasting increased revenue and an operating profit in the mid three-figure million euro range for the full year," it said in a written statement. Operating profit stood at 361 million euros, an increase of 27.6 percent and almost compensated for a loss posted in the first quarter, the company said. Revenues grew by more than six percent compared to a year earlier to 7.89 billion euros, it said. The group put earnings down to "consistent capacity and yield management in passenger and cargo traffic, clear restructuring successes at Austrian Airlines and good earnings contributions from the service companies". The German giant is undergoing an overhaul in the wake of fierce competition from budget airlines and said in February it aimed to save 1.5 billion euros by 2014. It announced in May plans to shed 3,500 administrative jobs which it said would make up about one third of the savings under the cost-cutting scheme. "The positive earnings performance and the lower unit costs in the second quarter give us confidence that it is worth the effort," Simone Menne, chief financial officer, said in the statement.