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AZUL's Q3 Loss Wider Than Expected, Revenues Miss Estimates
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Azul (AZUL - Free Report) incurred a loss (excluding $1.52 from non-recurring items) of 72 cents per share (loss of R$1.25) in the third quarter of 2022, wider than the Zacks Consensus Estimate of a loss of 68 cents. Loss per share, however, narrowed year over year.
Total revenues of $835.6 million (R$4,376.8 million) missed the Zacks Consensus Estimate of $849 million but increased 60.7% year over year as air-travel demand improved. With more people opting for air-travel, Azul’s passenger revenues, contributing 93.1% to the top line, surged 69.7% year over year (on higher total capacity). Cargo and other revenues declined 4.7% year over year due to reduced international cargo capacity.
Operating Statistics
Consolidated traffic, measured in revenue passenger kilometers (RPKs), increased 22.4% (up 5.6% in domestic and more than 100% on the international front) year over year. Consolidated available seat kilometers (ASK), measuring an airline's passenger-carrying capacity, increased 19.5% from the same-period level last year with 211.5% growth in international capacity. The same expanded 5.8% on the domestic front. Since the traffic surge was more than the extent of capacity expansion, the load factor (percentage of seats filled with passengers) rose 1.9 percentage points to 81.8%.
Azul’s total revenues per ASK or RASK soared 38.3%, while passenger revenues per ASK or PRASK increased 34.8% year over year. Results were driven by a strong domestic demand environment in Azul’s markets. Cost per ASK (CASK) increased 28.8% from the third-quarter 2021 reported figure to 38.39 cents, mainly due to higher jet fuel prices. Fuel cost per liter increased 85.3% from the third-quarter 2021 level, with oil prices moving north. CASK excluding fuel inched up 1.9% to 20.02 cents. Average fare surged 49.3% from the third-quarter-2021 figure.
Azul exited the third quarter of 2022 with a total passenger operating fleet of 168 aircraft. The average age of the fleet was 7 years. The contractual fleet size was 182.
Liquidity
Azul, currently carrying a Zacks Rank #3 (Hold), exited the September quarter with a total liquidity of R$3.4 billion. Gross debt increased 1.8% sequentially, mainly due to the depreciation of the Brazilian Real. You can seethe complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Airline Companies in Q3
Delta Air Lines’ (DAL - Free Report) third-quarter 2022 earnings (excluding 42 cents from non-recurring items) of $1.51 per share fell short of the Zacks Consensus Estimate of $1.56. Escalated operating expenses induced the earnings miss. Multiple flight cancelations and booking weaknesses due to Hurricane Ian also hurt results. DAL reported earnings of 30 cents per share a year ago, dim in comparison to the current scenario, as air -travel demand was tepid at that time.
DAL reported revenues of $13,975 million, lagging the Zacks Consensus Estimate of $14,157.2 million. Driven by high air-travel demand, total revenues increased more than 52% on a year-over-year basis.
United Airlines’ (UAL - Free Report) third-quarter 2022 earnings (excluding 5 cents from non-recurring items) of $2.81 per share beat the Zacks Consensus Estimate of $2.21 and our estimate of $2.17. Upbeat air-travel demand aided results.
In the year-ago quarter, UAL incurred a loss of $1.02 per share as air-travel demand was not as buoyant as in the current scenario. The third quarter of 2022 was the second consecutive profitable period at UAL since the onset of the pandemic.
Operating revenues of $12,877 million beat the Zacks Consensus Estimate of $12,709.5 million and our estimate of $12, 631.6 million. UAL’s revenues increased more than 66% year over year owing to an uptick in air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.2% from third-quarter 2019 (pre-coronavirus) levels.
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AZUL's Q3 Loss Wider Than Expected, Revenues Miss Estimates
Azul (AZUL - Free Report) incurred a loss (excluding $1.52 from non-recurring items) of 72 cents per share (loss of R$1.25) in the third quarter of 2022, wider than the Zacks Consensus Estimate of a loss of 68 cents. Loss per share, however, narrowed year over year.
Total revenues of $835.6 million (R$4,376.8 million) missed the Zacks Consensus Estimate of $849 million but increased 60.7% year over year as air-travel demand improved. With more people opting for air-travel, Azul’s passenger revenues, contributing 93.1% to the top line, surged 69.7% year over year (on higher total capacity). Cargo and other revenues declined 4.7% year over year due to reduced international cargo capacity.
Operating Statistics
Consolidated traffic, measured in revenue passenger kilometers (RPKs), increased 22.4% (up 5.6% in domestic and more than 100% on the international front) year over year. Consolidated available seat kilometers (ASK), measuring an airline's passenger-carrying capacity, increased 19.5% from the same-period level last year with 211.5% growth in international capacity. The same expanded 5.8% on the domestic front. Since the traffic surge was more than the extent of capacity expansion, the load factor (percentage of seats filled with passengers) rose 1.9 percentage points to 81.8%.
Azul’s total revenues per ASK or RASK soared 38.3%, while passenger revenues per ASK or PRASK increased 34.8% year over year. Results were driven by a strong domestic demand environment in Azul’s markets. Cost per ASK (CASK) increased 28.8% from the third-quarter 2021 reported figure to 38.39 cents, mainly due to higher jet fuel prices. Fuel cost per liter increased 85.3% from the third-quarter 2021 level, with oil prices moving north. CASK excluding fuel inched up 1.9% to 20.02 cents. Average fare surged 49.3% from the third-quarter-2021 figure.
Azul exited the third quarter of 2022 with a total passenger operating fleet of 168 aircraft. The average age of the fleet was 7 years. The contractual fleet size was 182.
Liquidity
Azul, currently carrying a Zacks Rank #3 (Hold), exited the September quarter with a total liquidity of R$3.4 billion. Gross debt increased 1.8% sequentially, mainly due to the depreciation of the Brazilian Real. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Airline Companies in Q3
Delta Air Lines’ (DAL - Free Report) third-quarter 2022 earnings (excluding 42 cents from non-recurring items) of $1.51 per share fell short of the Zacks Consensus Estimate of $1.56. Escalated operating expenses induced the earnings miss. Multiple flight cancelations and booking weaknesses due to Hurricane Ian also hurt results. DAL reported earnings of 30 cents per share a year ago, dim in comparison to the current scenario, as air -travel demand was tepid at that time.
DAL reported revenues of $13,975 million, lagging the Zacks Consensus Estimate of $14,157.2 million. Driven by high air-travel demand, total revenues increased more than 52% on a year-over-year basis.
United Airlines’ (UAL - Free Report) third-quarter 2022 earnings (excluding 5 cents from non-recurring items) of $2.81 per share beat the Zacks Consensus Estimate of $2.21 and our estimate of $2.17. Upbeat air-travel demand aided results.
In the year-ago quarter, UAL incurred a loss of $1.02 per share as air-travel demand was not as buoyant as in the current scenario. The third quarter of 2022 was the second consecutive profitable period at UAL since the onset of the pandemic.
Operating revenues of $12,877 million beat the Zacks Consensus Estimate of $12,709.5 million and our estimate of $12, 631.6 million. UAL’s revenues increased more than 66% year over year owing to an uptick in air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.2% from third-quarter 2019 (pre-coronavirus) levels.