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Azul has a dismal earnings record. The carrier’s bottom line underperformed the Zacks Consensus Estimate in three of the last four quarters (beating the same in one). It has a trailing four-quarter negative earnings surprise of 24.91%, on average.
The Zacks Consensus Estimate for the to-be-reported quarter’s bottom line is currently pegged at a loss of 57 cents, remaining unchanged in the past 60 days.
Against this backdrop, let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.
The current scenario of rising fuel costs does not bode well for the airline and is likely to have hurt the bottom line in the fourth quarter.
Strong e-commerce growth leading to a rise in cargo revenues is likely to have driven Azul’s fourth-quarter top line.
Both passenger revenues (which account for the bulk of the company’s top line) and load factor (percentage of seats filled with passengers) are expected to have surged in the December-end quarter, owing to rising air-travel demand post widespread vaccination programs in Brazil.
What Does the Zacks Model Say?
Our proven model does not predict an earnings beat for Azul this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. But that is not the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Azul has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Azul carries a Zacks Rank #3 currently.
Highlights of Q3
Azul’s loss (excluding $2.09 from non-recurring items) amounted to $1.08 per share in third-quarter 2021, narrower than the Zacks Consensus Estimate of a loss of $1.35. The amount of loss also narrowed year over year. Total revenues of $520 million outperformed the Zacks Consensus Estimate of $457.9 million and increased year over year (up 59.6% sequentially) as air-travel demand improves, courtesy of widespread vaccination programs in Brazil.
CSX reported fourth-quarter 2021 earnings of 42 cents per share, which surpassed the Zacks Consensus Estimate by a penny. The bottom line increased in double digits year over year owing to higher revenues.
CSX’s total revenues of $3,427 million outperformed the Zacks Consensus Estimate of $3296 million. The top line rose 21.3% year over year on growth across all its businesses and revenues from Quality Carriers, which was acquired last July.
Canadian National reported fourth-quarter 2021 earnings (excluding 2 cents from non-recurring items) of $1.36 per share (C$1.71), which surpassed the Zacks Consensus Estimate of $1.21. The bottom line increased in double digits year over year on lower costs.
Canadian National’s quarterly revenues of $2,977.4 million (C$3,753 million) topped the Zacks Consensus Estimate of $2,917.4 million. The top line increased year over year, driven by higher freight rates and fuel surcharges.
GATX reported fourth-quarter 2021 earnings (excluding 11 cents from non-recurring items) of $1.58 per share, which surpassed the Zacks Consensus Estimate of $1.07. The bottom line surged more than 200% year over year.
GATX’s total revenues of $321 million increased 5.3% year over year, mainly owing to a 5.2% rise in lease revenues, which came in at $288.4 million. Lease revenues contributed 89.8% to the top line.
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What's in the Cards for Azul (AZUL) This Earnings Season?
Azul S.A. (AZUL - Free Report) is slated to report fourth-quarter 2021 financial numbers on Feb 24.
Azul has a dismal earnings record. The carrier’s bottom line underperformed the Zacks Consensus Estimate in three of the last four quarters (beating the same in one). It has a trailing four-quarter negative earnings surprise of 24.91%, on average.
The Zacks Consensus Estimate for the to-be-reported quarter’s bottom line is currently pegged at a loss of 57 cents, remaining unchanged in the past 60 days.
Against this backdrop, let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.
The current scenario of rising fuel costs does not bode well for the airline and is likely to have hurt the bottom line in the fourth quarter.
Strong e-commerce growth leading to a rise in cargo revenues is likely to have driven Azul’s fourth-quarter top line.
AZUL Price and EPS Surprise
AZUL price-eps-surprise | AZUL Quote
Both passenger revenues (which account for the bulk of the company’s top line) and load factor (percentage of seats filled with passengers) are expected to have surged in the December-end quarter, owing to rising air-travel demand post widespread vaccination programs in Brazil.
What Does the Zacks Model Say?
Our proven model does not predict an earnings beat for Azul this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. But that is not the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Azul has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Azul carries a Zacks Rank #3 currently.
Highlights of Q3
Azul’s loss (excluding $2.09 from non-recurring items) amounted to $1.08 per share in third-quarter 2021, narrower than the Zacks Consensus Estimate of a loss of $1.35. The amount of loss also narrowed year over year. Total revenues of $520 million outperformed the Zacks Consensus Estimate of $457.9 million and increased year over year (up 59.6% sequentially) as air-travel demand improves, courtesy of widespread vaccination programs in Brazil.
Sectorial Snapshots
Within the broader Transportation sector, the likes of CSX Corporation (CSX - Free Report) , Canadian National Railway (CNI - Free Report) and GATX Corporation (GATX - Free Report) reported fourth-quarter 2021 results last month.
CSX reported fourth-quarter 2021 earnings of 42 cents per share, which surpassed the Zacks Consensus Estimate by a penny. The bottom line increased in double digits year over year owing to higher revenues.
CSX’s total revenues of $3,427 million outperformed the Zacks Consensus Estimate of $3296 million. The top line rose 21.3% year over year on growth across all its businesses and revenues from Quality Carriers, which was acquired last July.
Canadian National reported fourth-quarter 2021 earnings (excluding 2 cents from non-recurring items) of $1.36 per share (C$1.71), which surpassed the Zacks Consensus Estimate of $1.21. The bottom line increased in double digits year over year on lower costs.
Canadian National’s quarterly revenues of $2,977.4 million (C$3,753 million) topped the Zacks Consensus Estimate of $2,917.4 million. The top line increased year over year, driven by higher freight rates and fuel surcharges.
GATX reported fourth-quarter 2021 earnings (excluding 11 cents from non-recurring items) of $1.58 per share, which surpassed the Zacks Consensus Estimate of $1.07. The bottom line surged more than 200% year over year.
GATX’s total revenues of $321 million increased 5.3% year over year, mainly owing to a 5.2% rise in lease revenues, which came in at $288.4 million. Lease revenues contributed 89.8% to the top line.