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Gol Linhas' (GOL) Q1 Loss Wider Than Expected, Revenues Miss

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Gol Linhas Aereas Inteligentes incurred a loss (excluding $1.63 from non-recurring items) of 89 cents per share in the first quarter of 2021, wider than the Zacks Consensus Estimate of a loss of 74 cents. In the year-ago period, the company had reported earnings of 20 cents.

Net operating revenues of $286.8 million missed the Zacks Consensus Estimate of $300.9 million. Moreover, the top line plunged approximately 60% year over year with passenger revenues (accounting for 90.3% of total revenues) plummeting 51.8% year over year due to suppressed air-travel demand amid coronavirus concerns. Cargo and other revenues also declined 26.7%.

Operational Statistics

Consolidated revenue passenger kilometers (RPK), the measure for revenues generated per kilometer per passenger, were down 43.8% year over year. The metric fell 35.4% on the domestic front. The carrier did not operate regular international flights in the quarter.

Consolidated available seat kilometers (ASK), measuring an airline's passenger-carrying capacity, decreased 43.8% year over year. Domestic capacity slumped 34.5%.

The company’s total load factor (percentage of seats filled with passengers) was 79.9%, nearly flat year over year since traffic decline was commensurate with capacity decrease. Net yield dropped 14.3% year over year.

Net passenger revenues per ASK declined 14.2%. Meanwhile, net revenues per ASK fell 11.3%. Average fuel price per liter dipped marginally.  However, cost per ASK increased 54.2% year over year. Excluding fuel, the metric surged 98.5%.  Meanwhile, total operating expenses tanked 35.9% year over year with aircraft-fuel-related costs plunging 47.8%. Expenses on salaries, wages and benefits also declined 50.2% year over year.

Gol Linhas, carrying a Zacks Rank #4 (Sell), exited the first quarter with total liquidity (cash and cash equivalents, cash investments, restricted cash, accounts receivable, and securities and receivables) of R$1.8 billion compared with R$4.2 billion at the end of the year-ago period.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

During the first quarter, operating activities consumed R$366.4 million compared with an operating cash flow of R$1,122 million in the year-ago period. Long-term debt totaled R$14.75 billion at the end of the reported quarter, up 23.4% year over year.

Gol Linhas’ fleet at the end of the quarter comprised of 127 Boeing 737 jets (119 NGs and 8 operational MAXs). The average age of the fleet was 11.2 years.

Q2 Outlook

Gol Linhas expects second-quarter capacity to decline 40% from the first quarter due to increased restrictions imposed as a result of the worsening of the pandemic. Revenues are estimated to decrease approximately 35% sequentially in the second quarter.

Further, the company forecasts EBITDA margin in the range of 11-13% for the second quarter. Average fuel price per liter is estimated in the range of R$3.2-R$3.3. Passenger revenues per ASK is expected to drop around 15%. Meanwhile, operating cost per ASK, excluding fuel, is predicted to decrease 27%.

The airline estimates RPK to surge 340% compared with the second quarter of 2020. Additionally, it expects ASK to rise 330% year over year. The number of seats is forecast to jump by approximately 540%.

Performance of Other Airline Stocks

United Airlines (UAL - Free Report) , carrying a Zacks Rank #4, incurred a loss (excluding $3.21 from non-recurring items) of $7.5 per share in the first quarter of 2021, wider than the Zacks Consensus Estimate of a loss of $6.97. Operating revenues of $3,221 million also fell short of the Zacks Consensus Estimate of $3,253.1 million.

Southwest Airlines (LUV - Free Report) , carrying a Zacks Rank #3 (Hold), incurred a loss of $1.72 per share (excluding $1.91 from non-recurring items) in the first quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $1.82. Meanwhile, operating revenues of $2,052 million surpassed the Zacks Consensus Estimate of $2,031.7 million.

Alaska Air Group (ALK - Free Report) , carrying a Zacks Rank #3, incurred a loss (excluding $2.46 from non-recurring items) of $3.51 per share in the first quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $3.71. Moreover, revenues of $797 million surpassed the Zacks Consensus Estimate of $787.1 million.

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