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Is a Beat in Store for Copa Holdings (CPA) in Q3 Earnings?

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Copa Holdings (CPA - Free Report) is scheduled to report third-quarter 2021 earnings on Nov 17, after market close.

The Zacks Consensus Estimate for third-quarter loss has narrowed to 17 cents from a loss of 37 cents 60 days ago. The carrier has a trailing four-quarter earnings surprise of 14.5% (two miss and two beat), on average.

Let’s take a look at the factors that are expected to have influenced the company’s performance in the September quarter.

Copa Holdings, S.A. Price and EPS Surprise


Copa Holdings, S.A. Price and EPS Surprise

Copa Holdings, S.A. price-eps-surprise | Copa Holdings, S.A. Quote


An improvement in air-travel demand in Latin America (owing to increased inoculation programs) is expected to get reflected in Copa Holdings’ passenger revenues. The Zacks Consensus Estimate for third-quarter passenger revenues indicates more than a 100% rise from the third-quarter 2020’s reported number.

With this anticipated surge in passenger revenues, the company’s top line is likely to reflect a surge  on a year-over-year basis. The company anticipates third-quarter total revenues to be at $415 million. The Zacks Consensus Estimate for the same is pegged at $421 million, indicating growth of more than 100% from the year-ago quarter’s reported number.

Capacity, measured in available seat miles/ASMs and traffic, measured in revenue passenger miles/RPM indicates a rise of more than 100% from its year-ago quarter’s reported figures, per the consensus mark. Consequently, load factor for the third quarter is estimated to be at 78%, up from 60% reported in the year-ago-quarter.

A rise in fuel cost is expected to have hurt the carrier’s third-quarter bottom line. Per the Zacks Consensus Estimate, average fuel price per gallon for the to-be-reported quarter is pegged at $2.15, suggesting a surge of 63% year over year.

What Does the Zacks Model Say?

Our proven model conclusively predicts an earnings beat for Copa Holdings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is exactly the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Copa Holdings has an Earnings ESP of +11.77% as the Most Accurate Estimate is pegged at a loss of 15 cents, while the Zacks Consensus Estimate is at a loss of 17 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Copa Holdings carries a Zacks Rank #3.

Highlights of Q2 Earnings

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 a loss of $2.70. Quarterly revenues of $304.3 million surpassed the Zacks Consensus Estimate of $268.4 million and increased 3.5% year over year.

Sectorial Snapshots

Let’s look into some of the already released third-quarter 2021 earnings reports from companies within the Zacks Transportation sector.

CH Robinson (CHRW - Free Report) third-quarter 2021 earnings of $1.85 per share surpassed the Zacks Consensus Estimate of $1.41. The bottom line surged 85% year over year. Total revenues of $6,263.7 million also outperformed the Zacks Consensus Estimate of $5,377.9 million.

The top line increased 48.3% year over year owing to higher pricing and volumes across most of the company’s service lines. The stock has moved up 1.7% in the past year. CH Robinson sports a Zacks Rank #1, at present.

J.B. Hunt Transportation Services (JBHT - Free Report) reported third-quarter earnings of $1.88 per share, surpassing the Zacks Consensus Estimate of $1.77. Total operating revenues of $3144.8 million outperformed the Zacks Consensus Estimate of $3002.1 million.

The company exited the third quarter with cash and cash equivalents of $529.6 million compared with $313.3 million at the end of 2020. Long-term debt at J.B. Hunt was $944.9 million compared with $1.31 billion at 2020 end. The stock has soared 50.2% in the past year. J.B. Hunt currently carries a Zacks Rank of 2.

Old Dominion Freight Line’s (ODFL - Free Report) third-quarter 2021 earnings per share of $2.47 outpaced the Zacks Consensus Estimate by 10 cents. The bottom line surged 44.4% year over year. The upside was driven by an improvement in the operating ratio (operating expenses, as a percentage of revenues) on the back of higher revenues.

Revenues at Old Dominion, currently a Zacks #2 Ranked stock, came in at $1400 million. The top line surpassed the Zacks Consensus Estimate of $1,360.3 million and rose 32.3% year over year. The uptick was backed by a 13.7% increase in LTL (Less-Than-Truckload) tons and a 15.7% rise in LTL revenue per hundredweight. Shares of Old Dominion have soared 73.4% in the past year.