Back to top

Image: Bigstock

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

Read MoreHide Full Article

Gol Linhas Aereas Inteligentes (GOL - Free Report) 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.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>