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KLM profits grounded
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November 4, 1998: 7:50 a.m. ET
Asian crisis and Northwest pilots' strike bring down earnings
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LONDON (CNNfn) - KLM, the Dutch national airline, announced disappointing second-quarter earnings Wednesday, pulling it's stock lower.
KLM reported net profits of 361 million guilders ($193 million) in the three months ending in September, down from 884 million guilders last year.
KLM blamed the financial crisis in Asia and the 15-day strike at U.S. partner Northwest Airlines (NWAC).
Comparisons are muddied by one-time gains. Last year's profit figure included a 421 million guilder profit from the sale of Northwest shares. In the latest quarter KLM made an exceptional gain of 101 million guilders from selling a British tour company.
"At the operating level the numbers were worse than expected", said a London-based analyst, "they're not making enough progress on reducing costs".
Analysts also criticized the slow pace of KLM's proposed tie-up with Italian flag carrier Alitalia.
But KLM insisted the cooperation agreement is on track. "Alitalia is a little delayed, but there is nothing sinister behind it," said KLM's Chief Financial Officer Rod Abrahamsen at a results press conference.
He said he expected an announcement before the end of the year.
KLM stock traded mid-day Wednesday at 56.7 guilders, down 1.2 percent.
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