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GOL Linhas' (GOL) Stock Surges 50% in 30 Days: Here's Why

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Shares of Gol Linhas (GOL - Free Report) have had a good run on the bourses lately, gaining 50% in a month’s time. The uptick is primarily owing to the improved air-travel demand scenario, which led to better-than-expected revenue results for second-quarter 2022 (released on Jul 28). With people again taking to the skies, the top line surged in excess of 200% in the June quarter year over year. The improved guidance for current-year total net revenues, driven by higher passenger volumes, also contributed to the share price appreciation.

Findings From the Earnings Report

Gol Linhas incurred a loss (excluding $2.17 from non-recurring items) of 43 cents per share in the second quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 60 cents. In the year-ago quarter, Gol incurred a loss of $1.15 per share.

Net operating revenues of $660.9 million surpassed the Zacks Consensus Estimate of $645 million. Revenues from passenger transportation, accounting for 92.4% of total revenues, surged 237.5%, thanks to continued recovery in air-travel demand in Brazil. Cargo and other revenues jumped 75%. Gol Linhas transported 5.8 million passengers in the second quarter, doubling the year-ago number. Moreover, the metric represented 71.4% of second-quarter 2019 actuals.

Consolidated revenue passenger kilometers (RPK), the measure for revenues generated per kilometer per passenger, increased 103% from the second-quarter 2021 level. Consolidated available seat kilometers (ASK), which measure an airline's passenger-carrying capacity, also surged 123.2% year over year with expanded domestic capacity.

Gol Linhas’ total load factor (percentage of seats filled with passengers) was 77.2% in the quarter, down 7.9 percentage points year over year due to traffic increasing less than capacity expansion. Net yield climbed 66.2% year over year.

Net passenger revenues per ASK ascended 51%, while net revenues per ASK jumped 41%. Average fuel price per liter increased 80.5%. Cost per ASK declined 16.4% year over year due to higher capacity. Excluding fuel, the metric declined 39.4%. Total operating expenses surged 86.8% year over year, primarily due to a significant increase in fuel costs.

Gol Linhas, currently carrying a Zacks Rank #3 (Hold), exited the June quarter with total liquidity (cash and cash equivalents, cash investments, restricted cash, accounts receivable, and securities and receivables) of R$4 billion, up 8.7% year over year.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

During the second quarter, operating activities generated cash of R$1.6 billion compared with R$0.7 billion in the first quarter of 2022. Long-term debt totaled R$22.1 billion at the end of the reported quarter, up 10.1% sequentially.

At the reported-quarter end, Gol Linhas’ fleet comprised 144 Boeing 737 aircraft (110 NGs and 34 MAXs). The average age of the fleet was 10.2 years.

2022 Outlook

Gol Linhas expects capacity to increase 55-65% year over year in 2022. GOL estimates load factor to be 80% in the year. Total net revenues are now expected to be R$15.4 billion in the current year (previous outlook: R$13.7 billion). Fuel price per liter is predicted to be R$5.7 in the year. EBITDA margin is anticipated to be 20% while EBIT margin is forecast to be 8%. Pre-tax margin is estimated to be 0% in the year. Net capital investments are predicted to be R$700 million.

Performances of Some Transportation Companies in Q2

J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate. JBHT’s quarterly earnings of $2.42 per share surpassed the Zacks Consensus Estimate of $1.61 and improved 50.3% year over year.

JBHT’s total operating revenues of $3,837.53 million also outperformed the Zacks Consensus Estimate of $2,908.37 million. The top line jumped 32% year over year on the back of strength across all segments. J.B. Hunt’s total operating revenues, excluding fuel surcharges, rose 21.2% year over year.

CSX Corporation (CSX - Free Report) reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.

CSX’s quarterly earnings of 50 cents per share (excluding 4 cents from non-recurring items) beat the Zacks Consensus Estimate of 47 cents and improved 25% year over year.

CSX’s total revenues of $3,815 million outperformed the Zacks Consensus Estimate of $2,990 million. The top line increased 28% year over year on the back of higher revenues in almost all markets, driven by pricing gains, fuel surcharge and contribution from the acquisition of Quality Carriers. CSX’s overall revenues per unit increased 27%.

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Gol Linhas Aereas Inteligentes S.A. (GOL) - free report >>

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