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It has been about a month since the last earnings report for Copa Holdings (CPA - Free Report) . Shares were flat in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent trend continue leading up to its next earnings release, or is Copa Holdings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Copa Holdings Incurs Narrower Than Expected Loss in Q2
Copa Holdings incurred a loss (excluding $1.04 from non-recurring items) of 38 cents per share in the second quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $1.08. In the year-ago quarter, the company reported loss of $2.70. This was the fifth successive quarterly loss incurred by the Panamanian-based carrier. Results were hurt by coronavirus-induced limited flight operations. The company’s flight operations were only 48% of 2019 (pre-pandemic) level in the quarter.
Quarterly revenues of $304.3 million surpassed the Zacks Consensus Estimate of $268.4 million and surged 3.5% year over year.
Operational Statistics
Below we present all comparisons (in % terms) to second-quarter 2019 (pre-coronavirus levels).
Passenger revenues (contributed 92.4% to the top line) plunged 54.7% to 281.3 million in the second quarter, due to 52.2% less capacity (measured in available seat miles/ASMs).
On a consolidated basis, traffic (measured in revenue passenger miles or RPMs) fell 56.8% and capacity declined 52.2%. As traffic decline was more than the amount of capacity contraction, load factor (% of seats filled with passengers) contracted 8.2 percentage points to 76.9% in the reported quarter. Passenger revenue per available seat miles declined 5.2% to 9.5 cents. Additionally, revenue per available seat (RASM) mile slipped 1.4% to 10.3 cents. Cost per available seat mile (CASM) rose 9.8%. While excluding fuel, the metric surged 22.3%.
Total operating expenses declined 47.5% to $295.5 million, backed by lower passenger servicing and fuel cost. Expenses on fuel fell 60.4% due to reduced fuel consumption (down 55.5% to 35.3 million) and low jet fuel prices ($1.98, down 10.9%). Expenses on passenger servicing declined 70.6%. Moreover, expenses on wages, salaries and other employee benefits fell 49.2% due to reduced payroll expenses, voluntary temporary leaves and less variable compensation provisions. Flight operation cost also plunged 57.2%.
Other Details
Copa Holdings exited the second quarter with cash and cash equivalents of $256.8 million compared with $119.10 million at the end of 2020. Total debt, including lease liabilities, was $1.6 billion at the end of the second quarter. Management stated that the June quarter was the first one since the onset of the pandemic when the company’s operations resulted in cash accretion ($21 million per month on an average).
The company ended the second quarter with a consolidated fleet of 81 aircraft — 68 Boeing 737-800s and 13 Boeing 737 MAX 9s. Additionally, the company sold three Embraer 190 aircraft to a third party as was previously agreed upon.
Q3 Outlook
Copa Holdings expects capacity to reach approximately 4.5 billion in the third quarter of 2021. This represents around 70% of third-quarter 2019 levels.
The company anticipates total revenues of $415 million in the quarter, which is 58% of third-quarter 2019 revenues.
CASM (excluding fuel) is expected to be at approximately 6.6 cents, which indicates a decline of14% from second-quarter 2021 actuals.
Fuel price per gallon is expected to be at $2.15.
The company expects to be cash neutral for the September-end quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 14.22% due to these changes.
VGM Scores
Currently, Copa Holdings has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Copa Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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How Has CPA Performed 30 Days Post Earnings
It has been about a month since the last earnings report for Copa Holdings (CPA - Free Report) . Shares were flat in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent trend continue leading up to its next earnings release, or is Copa Holdings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Copa Holdings Incurs Narrower Than Expected Loss in Q2
Copa Holdings incurred a loss (excluding $1.04 from non-recurring items) of 38 cents per share in the second quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $1.08. In the year-ago quarter, the company reported loss of $2.70. This was the fifth successive quarterly loss incurred by the Panamanian-based carrier. Results were hurt by coronavirus-induced limited flight operations. The company’s flight operations were only 48% of 2019 (pre-pandemic) level in the quarter.
Quarterly revenues of $304.3 million surpassed the Zacks Consensus Estimate of $268.4 million and surged 3.5% year over year.
Operational Statistics
Below we present all comparisons (in % terms) to second-quarter 2019 (pre-coronavirus levels).
Passenger revenues (contributed 92.4% to the top line) plunged 54.7% to 281.3 million in the second quarter, due to 52.2% less capacity (measured in available seat miles/ASMs).
On a consolidated basis, traffic (measured in revenue passenger miles or RPMs) fell 56.8% and capacity declined 52.2%. As traffic decline was more than the amount of capacity contraction, load factor (% of seats filled with passengers) contracted 8.2 percentage points to 76.9% in the reported quarter. Passenger revenue per available seat miles declined 5.2% to 9.5 cents. Additionally, revenue per available seat (RASM) mile slipped 1.4% to 10.3 cents. Cost per available seat mile (CASM) rose 9.8%. While excluding fuel, the metric surged 22.3%.
Total operating expenses declined 47.5% to $295.5 million, backed by lower passenger servicing and fuel cost. Expenses on fuel fell 60.4% due to reduced fuel consumption (down 55.5% to 35.3 million) and low jet fuel prices ($1.98, down 10.9%). Expenses on passenger servicing declined 70.6%. Moreover, expenses on wages, salaries and other employee benefits fell 49.2% due to reduced payroll expenses, voluntary temporary leaves and less variable compensation provisions. Flight operation cost also plunged 57.2%.
Other Details
Copa Holdings exited the second quarter with cash and cash equivalents of $256.8 million compared with $119.10 million at the end of 2020. Total debt, including lease liabilities, was $1.6 billion at the end of the second quarter. Management stated that the June quarter was the first one since the onset of the pandemic when the company’s operations resulted in cash accretion ($21 million per month on an average).
The company ended the second quarter with a consolidated fleet of 81 aircraft — 68 Boeing 737-800s and 13 Boeing 737 MAX 9s. Additionally, the company sold three Embraer 190 aircraft to a third party as was previously agreed upon.
Q3 Outlook
Copa Holdings expects capacity to reach approximately 4.5 billion in the third quarter of 2021. This represents around 70% of third-quarter 2019 levels.
The company anticipates total revenues of $415 million in the quarter, which is 58% of third-quarter 2019 revenues.
CASM (excluding fuel) is expected to be at approximately 6.6 cents, which indicates a decline of14% from second-quarter 2021 actuals.
Fuel price per gallon is expected to be at $2.15.
The company expects to be cash neutral for the September-end quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 14.22% due to these changes.
VGM Scores
Currently, Copa Holdings has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Copa Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.