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Ryanair (RYAAY) Q4 Loss Narrower Than Expected, Revenues Lag

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Ryanair Holdings (RYAAY - Free Report) incurred a loss (excluding 50 cents from non-recurring items) of 98 cents per share in the fourth quarter of fiscal 2022 (ended Mar 31, 2022), narrower than the Zacks Consensus Estimate of a loss of $1.11. However, the amount of loss narrowed significantly year over year. Results were hurt by the impact of Omicron and the Russia-Ukraine war on travel demand.

Quarterly revenues of $1,319.6 million fell short of the Zacks Consensus Estimate of $1,356.3 million but improved significantly year over year with increase in traffic despite lower average fares (down 27% year over year due to Omicron-induced woes and the Russian invasion of Ukraine).

Fiscal 2022 Results

Ryanair’s net loss came in at €355 million in fiscal 2022 compared with the year-ago period’s loss of €1,015 million. Traffic soared more than 200% year over year to 97.1 million (but still down 35% from pre-pandemic levels). Load factor in the period was 82%, reflecting an improvement of 11 percentage points from the year-ago period.

Ryanair Holdings PLC Price, Consensus and EPS Surprise

Ryanair Holdings PLC Price, Consensus and EPS Surprise

Ryanair Holdings PLC price-consensus-eps-surprise-chart | Ryanair Holdings PLC Quote


Geographically, total revenues from Italy (comprised of 24.8% of the top line) climbed more than 200% year over year while the same from Spain (18.2%) jumped more than 100%. Revenues from the United Kingdom (11.7%) and Ireland (4.8%) soared more than 100% each. Revenues from other European countries (40.5%) skyrocketed more than 200% year over year.

Scheduled revenues climbed more than 100% year over year due to increase in traffic. Ancillary revenues jumped more than 200% year over year in the reported quarter due to strong performance in priority boarding and reserved seating, apart from robust traffic. The airline’s fuel and oil expenses increased by more than 200% year over year due to rise in sectors flown and high jet fuel prices. Total operating expenses rose more than 100% year over year. Ryanair, carrying a Zacks Rank #3 (Hold), had cash of €3.63 billion as of Mar 31, 2022, higher than €3 billion as of Dec 31, 2021.

Outlook

Ryanair expects summer 2022 average fares to be higher than the summer 2019 level. The company expects fiscal 2023 traffic to be 165 million, higher than the fiscal 2022 figure as well as 149 million registered in fiscal 2020 (pre-pandemic). The company expects to return to profitability in fiscal 2023.

Performance of Other Airlines

Gol Linhas Aereas Inteligentes , carrying a Zacks Rank #3, incurred a loss (excluding $3.15 from non-recurring items) of 63 cents per share in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 67 cents. The amount of loss narrowed year over year.

Gol Linhas’ net operating revenues of $616.2 million outperformed the Zacks Consensus Estimate of $603.2 million. The top line not only surged more than 100% year over year, but also came in above the first quarter of 2019.

Azul (AZUL - Free Report) , carrying a Zacks Rank #4 (Sell), 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.

Azul’s 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.

Southwest Airlines (LUV - Free Report) , carrying a Zacks Rank #1 (Strong Buy), incurred a loss (excluding 15 cents from non-recurring items) of 32 cents per share in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 34 cents. Results were hurt by Omicron-induced woes in January and February. You can see the complete list of today’s Zacks #1 Rank stocks here.

Southwest’s operating revenues of $4694 million outperformed the Zacks Consensus Estimate of $4,663.8 million and also jumped more than 100% year over year. Passenger revenues improved more than 100% year over year.


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