Back to top

Analyst Blog

Brazilian low-cost and low-fare airline, Gol Linhas Aéreas Inteligentes S.A. (GOL - Analyst Report) issued another series of Guaranteed Notes amounting to $22.7 million in order to raise money for financing engine maintenance. The Notes carried an interest rate of 0.85% p.a.

This was the second series of its kind; the first worth $39.1 million carrying interest rate of 1.0% p.a. was issued in July 2012. These notes, with a term period of two years, were guaranteed by the Export-Import Bank of the United States (Ex-Im Bank). The proceeds from both the issues will be used for funding maintenance of CFM56-7B engines by Delta TechOps, the maintenance division of Delta Air Lines.

Exiting the second quarter of 2012, GOL Linhas' cash and cash equivalents decreased 25.2% sequentially to R$983.3 million (US$472.7 million) while Long-term debt increased 5.1% to R$4,627.2 million (US$2,224.5 million).

We believe GOL Linhas’ strategy of enhancing its fleet efficacy is expected to boost productivity and occupancy rates in the coming quarters. The company targets to achieve a fleet size of 138 by the end of 2012, 136 by 2013 and 140 by 2014.

The Zacks Consensus Estimate for the third quarter of 2012 stands at a loss of 19 cents, representing a year-over-year growth of 82.9%. Estimate for 2012 and 2013 stands at a loss of 96 cents and earnings of 23 cents, respectively, reflecting a year-over-year growth of 37.5% for 2012 and 124.3% for 2013.

We currently have a Neutral recommendation on GOL. The stock also bears a Zacks #3 (Hold) Rank. The company gives tough competition to other industry players, such as Copa Holdings SA (CPA - Snapshot Report) and LAN Airlines S.A (LFL - Snapshot Report), both having a Zacks #3 (Hold) Rank.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
FELCOR LODG… FCH 10.47 +3.46%
OLD DOMINIO… ODFL 63.48 +1.18%
VASCO DATA… VDSI 13.57 +0.67%
AMEDISYS IN… AMED 20.18 +0.10%
LENOVO GROU… LNVGY 27.07 +0.04%