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UPDATE 1-Thai Airways Q3 profit below forecast, shares fall

By Arada Kultawanich BANGKOK, Nov 12 (Reuters) - Flag carrier Thai Airways International Pcl reported on Friday a worse-than-expected third-quarter net profit, reversing a year-earlier loss and stung by foreign exchange losses. Its stock fell as much as 7.4 percent to a three-week low of 43.50 baht, hit by plans to spend 2.3 billion baht ($77.2 million) on an early retirement scheme this year. "This is not what we had expected. The retirement costs might hit earnings in the fourth quarter," said Far East Securities analyst Phontep Wongnak. "However, we remain positive on the airline's prospects due to a recovery in global tourism." While its foreign exchange losses were larger than expected, its operating profit was better than a year earlier. The results come three days after rival Singapore Airlines (SIA), the world's second-largest carrier by market value, reported better-than-expected second-quarter earnings, boosted by a strong recovery in passenger traffic. Analysts said a strong outlook for the Thai state-controlled airline over the high tourism season from December to March is expected to offset a rise in oil prices and the effects of a surge in the baht currency to 13 year highs against the dollar. Its stock ended down 2.7 percent at 46 baht, while the main Thai index lost 1.1 percent. That followed gains on Thursday to a 4-year high after the European Commission decided to drop charges against it relating to price-fixing. Thai Airways earned a net 136.4 million baht ($4.6 million), or 0.08 baht per share, in July-September, against a 4.03 billion baht loss a year earlier.

The profit was worse than the average 1.01 billion baht forecast by four analysts surveyed by Reuters. The carrier, 51 percent-owned by the Finance Ministry, raised 15 billion baht in September by selling new shares to existing shareholders and the public. The completion of that fund-raising, the recovery in tourism and the profit outlook helped the airline's stock surge 80 percent during the July-September quarter, far outpacing the main index's 22 percent rise. ($1=29.79 Baht) (Reporting by Arada Kultawanich; Editing by Jason Szep) ((arada.kultawanich@thomsonreuters.com; +662 648 9732, Reuters Messaging: arada.kultawanich.reuters.com@reuters.net)) Keywords: THAIAIR/RESULTS (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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