06:55 AM EDT, 11/01/2024 (MT Newswires) -- Air Canada ( ACDVF ) on Friday flew to a huge third-quarter earnings beat even as revenue fell after pilot contract negotiations "added complexity" during the peak summer season. The company lowered its full-year guidance.

Third-quarter adjusted EPS fell to $2.57, compared with $3.41 in the same quarter last year. The results beat the consensus Capital IQ forecast of $1.62.

Operating revenue, which fell 4% to $6.1 billion due to lower passenger revenues, was in line with the Capital IQ consensus forecast.

Among other highlights, the airline said third-quarter operating income of $1.04 billion and adjusted EBITDA of $1.52 billion decreased $375 million and $307 million, respectively. It generated cash flows from operating activities of $737 million and free cash flow of $282 million in the quarter, an increase of $329 million and $147 million, respectively.

It had a leverage ratio of 1.0 as at September 30, 2024, compared to 1.1 at end of 2023.

Air Canada ( ACDVF ) is also announcing today that the Toronto Stock Exchange has accepted notice of its intention to make a normal course issuer bid allowing it to purchase for cancellation up to 35.8 million of its Class A variable voting shares and Class B voting shares. This represents about 10% of the public float.

For the full year 2024, Air Canada ( ACDVF ) is updating its guidance to account for changed expectations of jet fuel prices and the impact of contract-related cost adjustments. On ASM capacity its new 2024 guidance sees approximately 5% increase versus 2023 (previously saw 5.5% to 6.5% increase versus 2023); on Adjusted CASM it now forecasts approximately 2% increase versus 2023 (versus 2.5% to 3.5% previously); and on Adjusted EBITDA it sees approximately $3.5 billion ($3.1 billion to $3.4 billion prior).

Michael Rousseau, president and chief executive of Air Canada ( ACDVF ) said in a statement: "The demand environment remains favorable. We have adjusted our full-year guidance and underlying assumptions to account for the evolution of the fuel price environment and for certain contract-related adjustments."

Air Canada ( ACDVF ), which will have an investor day on Dec. 17, dropped 1.6% to $18.87 yesterday.