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AZUL's Q1 Loss Narrower Than Expected, Revenues Miss Mark
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Azul (AZUL - Free Report) incurred a loss (excluding $4.89 from non-recurring items) of $1.14 per share in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of $1.21. The amount of loss narrowed year over year as well.
Total revenues of $610.9 million missed the Zacks Consensus Estimate of $638.5 million but increased 82.9% year over year as air-travel demand improved, courtesy of widespread vaccination programs in Brazil.
With more people taking to the skies, Azul’s passenger revenues, contributing 89% to the top line, surged 77.9% year over year (on higher total capacity). Cargo and other revenues rose 53.4% year over year, primarily owing to upbeat demand for Azul’s logistics solutions.
Consolidated traffic, measured in revenue passenger kilometers (RPKs), surged 32.9% (up 21.4% in domestic & more than 100% on the international front) year over year. International traffic surged more than domestic traffic.
Consolidated available seat kilometers (ASK), measuring an airline's passenger-carrying capacity, rose 26.4% from the same-period level last year with a 296.4% rise in international capacity. The same expanded 16.2% on the domestic front. Since traffic surge was more than the amount of capacity expansion, load factor (percentage of seats filled with passengers) rose 3.9 percentage points to 80.4%.
While Azul’s total revenues per ASK or RASK soared 38.3%, passenger revenues per ASK or PRASK increased 40.7% year over year. Results were driven by a strong domestic demand environment in Azul’s markets. Cost per ASK (CASK) increased 21.1% from the first-quarter 2021 reported figure to 34.45 cents, mainly due to a rise in jet fuel prices. Jet fuel prices increased 57% from the first-quarter 2021 level, with oil prices moving north. CASK excluding fuel rose 6% to 21.33 cents. Average fare surged 47.6% from first-quarter 2021 figure.
Azul exited the first quarter of 2022 with a total passenger operating fleet of 166 aircraft. The average age of the fleet was 6.9 years. The contractual fleet size was 178.
Azul expects its capacity to grow approximately 10% from its 2019 reported figure.
RASK is expected to increase more than 20% from its 2019 reported figure. Current-year EBITDA (excluding non-recurrent items) is expected to be approximately $4 billion.
Earnings Snapshots
Within the broader Transportation sector, J.B. Hunt Transport Services (JBHT - Free Report) , CSX Corporation (CSX - Free Report) and United Airlines (UAL - Free Report) recently reported first-quarter 2022 results.
J.B. Hunt reported better-than-expected first-quarter 2022 earnings. Quarterly earnings of $2.29 per share surpassed the Zacks Consensus Estimate of $1.91. The bottom line surged 67.2% year over year on the back of higher revenues across all segments.
Total operating revenues of $3,488.6 million also outperformed the Zacks Consensus Estimate of $3,260.5 million. The top line jumped 33.3% year over year. JBHT currently carries a Zacks Rank #3 (Hold).
CSX Corp’s first-quarter 2022 earnings of 39 cents per share beat the Zacks Consensus Estimate by a penny despite the decrease in overall volumes as supply-chain issues continue to dent results. The bottom line improved 25.81% year over year owing to higher revenues, aided by increased shipping rates.
Total revenues of $3,413 million outperformed the Zacks Consensus Estimate of $3291.2 million. The top line increased 21.33% year over year. CSX carries a Zacks Rank of 3 at present.
United Airlines incurred a loss of $4.24 per share in the first quarter of 2022, wider than the Zacks Consensus Estimate of a loss of $4.19. This is the ninth consecutive quarterly loss incurred by UAL as coronavirus concerns continue to weigh on air-travel demand.
Operating revenues of $7,566 million also fell short of the Zacks Consensus Estimate of $7,657.2 million. UAL is presently Zacks #3 Ranked.
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AZUL's Q1 Loss Narrower Than Expected, Revenues Miss Mark
Azul (AZUL - Free Report) incurred a loss (excluding $4.89 from non-recurring items) of $1.14 per share in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of $1.21. The amount of loss narrowed year over year as well.
Total revenues of $610.9 million missed the Zacks Consensus Estimate of $638.5 million but increased 82.9% year over year as air-travel demand improved, courtesy of widespread vaccination programs in Brazil.
With more people taking to the skies, Azul’s passenger revenues, contributing 89% to the top line, surged 77.9% year over year (on higher total capacity). Cargo and other revenues rose 53.4% year over year, primarily owing to upbeat demand for Azul’s logistics solutions.
AZUL Price, Consensus and EPS Surprise
AZUL price-consensus-eps-surprise-chart | AZUL Quote
Operating Statistics
Consolidated traffic, measured in revenue passenger kilometers (RPKs), surged 32.9% (up 21.4% in domestic & more than 100% on the international front) year over year. International traffic surged more than domestic traffic.
Consolidated available seat kilometers (ASK), measuring an airline's passenger-carrying capacity, rose 26.4% from the same-period level last year with a 296.4% rise in international capacity. The same expanded 16.2% on the domestic front. Since traffic surge was more than the amount of capacity expansion, load factor (percentage of seats filled with passengers) rose 3.9 percentage points to 80.4%.
While Azul’s total revenues per ASK or RASK soared 38.3%, passenger revenues per ASK or PRASK increased 40.7% year over year. Results were driven by a strong domestic demand environment in Azul’s markets. Cost per ASK (CASK) increased 21.1% from the first-quarter 2021 reported figure to 34.45 cents, mainly due to a rise in jet fuel prices. Jet fuel prices increased 57% from the first-quarter 2021 level, with oil prices moving north. CASK excluding fuel rose 6% to 21.33 cents. Average fare surged 47.6% from first-quarter 2021 figure.
Azul exited the first quarter of 2022 with a total passenger operating fleet of 166 aircraft. The average age of the fleet was 6.9 years. The contractual fleet size was 178.
Liquidity
Azul, currently carrying a Zacks Rank #4 (Sell), exited the March quarter with total liquidity of R$6 billion. Gross debt decreased 12.9% sequentially. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
2022 Outlook
Azul expects its capacity to grow approximately 10% from its 2019 reported figure.
RASK is expected to increase more than 20% from its 2019 reported figure.
Current-year EBITDA (excluding non-recurrent items) is expected to be approximately $4 billion.
Earnings Snapshots
Within the broader Transportation sector, J.B. Hunt Transport Services (JBHT - Free Report) , CSX Corporation (CSX - Free Report) and United Airlines (UAL - Free Report) recently reported first-quarter 2022 results.
J.B. Hunt reported better-than-expected first-quarter 2022 earnings. Quarterly earnings of $2.29 per share surpassed the Zacks Consensus Estimate of $1.91. The bottom line surged 67.2% year over year on the back of higher revenues across all segments.
Total operating revenues of $3,488.6 million also outperformed the Zacks Consensus Estimate of $3,260.5 million. The top line jumped 33.3% year over year. JBHT currently carries a Zacks Rank #3 (Hold).
CSX Corp’s first-quarter 2022 earnings of 39 cents per share beat the Zacks Consensus Estimate by a penny despite the decrease in overall volumes as supply-chain issues continue to dent results. The bottom line improved 25.81% year over year owing to higher revenues, aided by increased shipping rates.
Total revenues of $3,413 million outperformed the Zacks Consensus Estimate of $3291.2 million. The top line increased 21.33% year over year. CSX carries a Zacks Rank of 3 at present.
United Airlines incurred a loss of $4.24 per share in the first quarter of 2022, wider than the Zacks Consensus Estimate of a loss of $4.19. This is the ninth consecutive quarterly loss incurred by UAL as coronavirus concerns continue to weigh on air-travel demand.
Operating revenues of $7,566 million also fell short of the Zacks Consensus Estimate of $7,657.2 million. UAL is presently Zacks #3 Ranked.