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GOL Linhas (GOL) Beats on Q3 Earnings & Revenues, Stock Up
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Shares of GOL Linhas Aereas Inteligentes S.A. were up 12.21% on Nov 8 to close the trading session at $21.50, following stellar results in the third quarter of 2017.
The company’s earnings per share of $1.49 outpaced the Zacks Consensus Estimate of 47 cents aided by higher revenues. In the year-ago quarter, this Latin-American carrier had reported breakeven earnings.
Net sales, comprising of cargo and passenger revenues, came in at $858.8 million (R$2.7 billion), surpassing the Zacks Consensus Estimate of $783.3 million. The top line expanded 13.2% on a year-over-year basis on the back of strong demand for air travel. While cargo revenues increased 7%, passenger revenues improved 14.1%.
Operational Statistics
Total revenue passenger kilometres (RPK) — the measure of revenues generated per kilometre per passenger — grew 5.1% year over year. While international RPK increased 10.1%, the same improved 4.5% on the domestic front.
Consolidated available seat kilometres (ASK) — the measure of an airline's passenger carrying capacity — expanded 4.5% year over year. The upside was driven by a 9.1% expansion in international ASK. The metric expanded 3.9% on the domestic front.
During the reported quarter, the company’s total load factor (percentage of seats filled with passengers) was 80.2% compared with 79.8% in the year-ago quarter. The metric improved as capacity expansion was outweighed by traffic growth.
Average fare at this Sao Paulo-based carrier increased 11.6% while average yield per passenger improved 8.6%. Net passenger revenue per available seat kilometres (PRASK) rose 9.2% while net operating revenues per available seat kilometres (RASK) was up 8.3%, which aided the top line. Also, cost per available seat kilometres (CASK), excluding fuel costs, increased 8.3% in the third quarter.
Financials
GOL Linhas exited the quarter with cash and cash equivalents of R$ 602.21 million compared with R$562.2 million at year-end 2016. Additionally, long-term debt totaled R$5,335 million at the end of the quarter compared with R$5,543 million at the end of 2016, which is impressive.
Operating expenses increased 10.5% to R$2,394.9 million mainly owing to a 26.2% rise in salary, wages and benefits. The rise in aircraft fuel costs also contributed to the improvement in operating expenses. While total volume of departures increased 2%, total number of seats available improved 2.4%, both on a year-over-year basis.
Gol Linhas Aereas Inteligentes S.A. Price, Consensus and EPS Surprise
GOL Linhas tweaked its forecast for 2017, earlier this year. The company now expects operating earnings before interest and taxes (EBIT) margin — a measure of the company's earnings ability — around 9% (previous guidance had projected the metric between 7% and 9%). Also, EBITDA margin is anticipated to be around 14% (previous guidance had projected the metric between 12% and 14%).
Currently, the carrier is projecting an average fleet size of 115 and expects capacity (available seat kilometers) to be around 0.5% (previous guidance had projected the metric to either remain flat or decline up to 2% on a year-over-year basis). Volume of departures are anticipated to grow around 4% (previous guidance had projected the metric to decline in the band of 3-5%).
Another important metric, load factor (percentage of seats filled by passengers) is now projected to be around 79% (previous guidance had forecasted the metric in the 77% to 79% range). Going forward, we expect the company’s focus on capacity discipline to result in increasing yields.
Apart from GOL, another Copa Holdings (CPA - Free Report) reported better-than-expected third- quarter earnings and revenues on Nov 8.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like Ship Finance International Limited (SFL - Free Report) and LATAM Airlines Group S.A. . While Ship Finance International is expected to release its third-quarter results on Dec 5, LATAM Airlines will unveil its results on Nov 15.
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It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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GOL Linhas (GOL) Beats on Q3 Earnings & Revenues, Stock Up
Shares of GOL Linhas Aereas Inteligentes S.A. were up 12.21% on Nov 8 to close the trading session at $21.50, following stellar results in the third quarter of 2017.
The company’s earnings per share of $1.49 outpaced the Zacks Consensus Estimate of 47 cents aided by higher revenues. In the year-ago quarter, this Latin-American carrier had reported breakeven earnings.
Net sales, comprising of cargo and passenger revenues, came in at $858.8 million (R$2.7 billion), surpassing the Zacks Consensus Estimate of $783.3 million. The top line expanded 13.2% on a year-over-year basis on the back of strong demand for air travel. While cargo revenues increased 7%, passenger revenues improved 14.1%.
Operational Statistics
Total revenue passenger kilometres (RPK) — the measure of revenues generated per kilometre per passenger — grew 5.1% year over year. While international RPK increased 10.1%, the same improved 4.5% on the domestic front.
Consolidated available seat kilometres (ASK) — the measure of an airline's passenger carrying capacity — expanded 4.5% year over year. The upside was driven by a 9.1% expansion in international ASK. The metric expanded 3.9% on the domestic front.
During the reported quarter, the company’s total load factor (percentage of seats filled with passengers) was 80.2% compared with 79.8% in the year-ago quarter. The metric improved as capacity expansion was outweighed by traffic growth.
Average fare at this Sao Paulo-based carrier increased 11.6% while average yield per passenger improved 8.6%. Net passenger revenue per available seat kilometres (PRASK) rose 9.2% while net operating revenues per available seat kilometres (RASK) was up 8.3%, which aided the top line. Also, cost per available seat kilometres (CASK), excluding fuel costs, increased 8.3% in the third quarter.
Financials
GOL Linhas exited the quarter with cash and cash equivalents of R$ 602.21 million compared with R$562.2 million at year-end 2016. Additionally, long-term debt totaled R$5,335 million at the end of the quarter compared with R$5,543 million at the end of 2016, which is impressive.
Operating expenses increased 10.5% to R$2,394.9 million mainly owing to a 26.2% rise in salary, wages and benefits. The rise in aircraft fuel costs also contributed to the improvement in operating expenses. While total volume of departures increased 2%, total number of seats available improved 2.4%, both on a year-over-year basis.
Gol Linhas Aereas Inteligentes S.A. Price, Consensus and EPS Surprise
Gol Linhas Aereas Inteligentes S.A. Price, Consensus and EPS Surprise | Gol Linhas Aereas Inteligentes S.A. Quote
2017 Outlook
GOL Linhas tweaked its forecast for 2017, earlier this year. The company now expects operating earnings before interest and taxes (EBIT) margin — a measure of the company's earnings ability — around 9% (previous guidance had projected the metric between 7% and 9%). Also, EBITDA margin is anticipated to be around 14% (previous guidance had projected the metric between 12% and 14%).
Currently, the carrier is projecting an average fleet size of 115 and expects capacity (available seat kilometers) to be around 0.5% (previous guidance had projected the metric to either remain flat or decline up to 2% on a year-over-year basis). Volume of departures are anticipated to grow around 4% (previous guidance had projected the metric to decline in the band of 3-5%).
Another important metric, load factor (percentage of seats filled by passengers) is now projected to be around 79% (previous guidance had forecasted the metric in the 77% to 79% range). Going forward, we expect the company’s focus on capacity discipline to result in increasing yields.
GOL Linhas carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Apart from GOL, another Copa Holdings (CPA - Free Report) reported better-than-expected third- quarter earnings and revenues on Nov 8.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting third-quarter earnings reports from key players like Ship Finance International Limited (SFL - Free Report) and LATAM Airlines Group S.A. . While Ship Finance International is expected to release its third-quarter results on Dec 5, LATAM Airlines will unveil its results on Nov 15.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>