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Auto & Transport Roundup: Market Talk

16 Sep 2017 8:20 am

The latest Market Talks covering the Auto and Transport sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

1902 GMT - The Transportation Department fines Denver-based Frontier Airlines $1.5M for violating its prohibition of long tarmac delays. Frontier was found to have allowed 12 planes at the Denver airport to remain on the tarmac for more than three hours each without giving passengers the chance to disembark. The problems occurred during and after a large snow storm there last December. The DOT says Frontier failed to properly adjust its operations in response to the storm and resulting gate congestion, ordered it to cease and desist from future violations and credited $900,000 of the fine to the airline for compensation provided to passengers on the affected flights and other delayed flights. Frontier says it is committed to complying with DOT rules and has revised its procedures for irregular winter weather operations. (susan.carey@wsj.com)

1701 GMT - Ryanair still plans to carry 131 million passengers in the fiscal year ending in March, despite announcing 40 to 50 flight cuts over the next six weeks. The move, the airline says, is in part in response to a shortage of crew as it adjusts its holiday period for staff to comply with Irish regulator demands. Ryanair also wants to address operational issues that led on-time performance to slump in early September. The flight cancellations will affect less than 1% of traffic this month and below 2% next month. No impact is expected beyond that. Ryanair shares closed down 1.95% before the disclosure. (robert.wall@wsj.com)

1642 GMT - Frustrated by domestic pricing weakness, JPMorgan downgrades its equity ratings on American Airlines, United Continental and Spirit Airlines to hold from buy. While the firm raises Southwest Airlines to buy from hold, it also slashes 4Q earnings-per-share estimates for seven carriers, including Southwest. American Airlines' 4Q EPS is now forecast at 56 cents, down from 98 cents, according to JPM. United's EPS is now seen at 64 cents, compared with $1.75, and Spirit is estimated at 34 cents, down from 75 cents. "We can't emphasize enough that managements are capable of fixing pricing," the firm says, not to be confused with price fixing. But JPM said it seems sees no evidence of renewed domestic pricing vigor. Shares are mostly lower, with American and Spirit down over 2.5%. (susan.carey@wsj.com)

1507 GMT - Ford's sales in Europe continued to slide in August, falling 2.4% in the region's core 20 markets, a troublesome sign for the US auto maker as it strives to remain profitable in a market that's long been a money loser for many car companies. The drop contrasts with the 5% gain posted by the broader industry in Europe and marks the fourth straight month car sales have fallen for Ford in the region. Ford executives have attributed the summer sales slump to tighter supplies of its popular Fiesta small car as the company retools its factories for a new model. However, European sales were also down for other car models, such as the Focus compact car and Mondeo sedan, reflecting a wider shift in consumer demand to roomier crossovers and sport-utilities. Ford's SUV sales were up 21% last month. (christina.rogers@wsj.com)

1339 GMT - Auto seating specialist Adient plans to have a prototype for its foray into jetliner seating ready by the end of the year, though its head of IR said it would be two years or more before it's ready to enter production. Adient has a test facility to secure regulatory review and has previously said it is targeting business-class seats, part of a partnership with Boeing. With thousands of jetliners in backlog, Adient is tackling a market dominated by United Technologies target Rockwell Collins, whose CEO is making a conference appearance today, and Zodiac Aerospace. (doug.cameron@wsj.com; @dougcameron)

1328 GMT - Air Berlin says several bids are in for part or all of the bankrupt German carrier. Today's the deadline for binding offers. The credit committee is due to convene Sept. 21. A final verdict on how Air Berlin will be sold is expected after a board meeting on Sept. 25, says Frank Kebekus, administrator for the Air Berlin bankruptcy process. Shares in Air Berlin are down 6.76%. (robert.wall@wsj.com)

1100 GMT - NordLB says it expects Volkswagen (VOW.XE) to remain the world's largest seller of cars, narrowly outpacing Toyota (TM), and raises Volkswagen's price target to EU155 from EUR145, after the German auto company reported strong growth in most regions for August and the past eight months today. Volkswagen is in a strong position in China, where the company made 36.6% of its total sales in the period, the analysts say, noting that overall an upwards trend in car sales may be consolidating. Volkswagen shares trade down 0.1% at EUR136.35. (Max.Bernhard@dowjones.com; @mxbernhard)

1004 GMT - Shares in Carnival PLC fall 5.4% to 4824 pence after Credit Suisse downgrades the cruise operator to hold from sell, citing geo-political and weather risks to demand. The Swiss brokerage says demand may fall in 2018 even as industry capacity rises, due to hurricane damage in the Caribbean market, concerns about business in the Mediterranean after the Barcelona terror attacks and the impact on China of the U.S. ban on travel to North Korea. Credit Suisse says it expects significant industry supply growth coupled with increasing demand threats for 2018 to result in lower 2018 yield growth. It reduces its price target to $70 from $78. (philip.waller@wsj.com)

0906 GMT - London blue-chips fall as the pound continues to climb following more hawkish comments from the Bank of England and Monetary Policy Committee member Gertjan Vlieghe's remarks Friday that the BOE may need to raise interest rates in coming months. The FTSE 100 Index drops 0.75% to 7240.4 as sterling gains 1% against the dollar to $1.3537. Asian markets respond in mixed fashion to fresh geo-political tensions caused by another missile test by North Korea. Indices in China and India close lower, though Hong Kong's Hang Seng and Japan's Nikkei ended higher. Pyongyang fired another missile over Japan in response to U.N. sanctions. Fashion chain Next PLC continues to gain, up 1.3% following Thursday's interim results. Cruise operator Carnival PLC falls 3.3% after a downgrade by Credit Suisse. (philip.waller@wsj.com)

(END) Dow Jones Newswires

September 16, 2017 04:20 ET (08:20 GMT)

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