A month has gone by since the last earnings report for Copa Holdings (CPA Quick QuoteCPA - Free Report) . Shares have added about 6.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Copa Holdings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Copa Holdings Beats on Q3 Earnings

Copa Holdings' third-quarter 2022 earnings of $2.91 per share surpassed the Zacks Consensus Estimate of $2.63 and rose significantly year over year. Revenues of $809.4 million missed the Zacks Consensus Estimate of $816.2 million but improved year over year on the back of passenger revenues.

Below, we present all comparisons (in % terms) with third-quarter 2019 levels (pre-coronavirus).

Passenger revenues (contributed 95.6% to the top line) increased 13% owing to higher yields (up 12.1%). Cargo and mail revenues jumped 80.2% to $26.4 million, owing to higher cargo volumes and yields. Other operating revenues improved 7.2% to $8.82 million, owing to revenues from non-air ConnectMiles partners.

On a consolidated basis, traffic (measured in revenue passenger miles or RPMs) grew 0.8%, while capacity (ASMs) decreased by 0.6%. As a result, the load factor increased 1.2 percentage points to 86.8% in the reported quarter. Passenger revenue per available seat miles (PRASM) increased 13.7% to 12.2 cents. Additionally, revenue per available seat mile (RASM) increased 15% to 12.8 cents. Cost per available seat mile (CASM) increased 16.4%. Excluding fuel, the metric dipped 5.3%. The average fuel price per liter soared 76.6% to $3.81.

Total operating expenses increased 15.7% to $665.75 million due to the 64.1% increase in fuel costs. Expenses on wages, salaries and other employee benefits fell 14.8% on reduced headcount. Sales and distribution costs increased 14.6% due to higher sales. Passenger servicing costs dropped 27.9%. Flight operation costs decreased 4.1%.

Copa Holdings exited the third quarter with cash and cash equivalents of $198.74 million compared with $134.13 million at the end of June 2022. Total debt, including lease liabilities, was $1.7 billion compared with $1.6 billion at the end of the second quarter.

CPA exited the third quarter with a consolidated fleet of 95 aircraft, which comprises 67 Boeing 737-800s, 18 Boeing 737 MAX 9s, 9 Boeing 737-700s, and 1 Boeing 737-800 freighter. During the reported quarter, the carrier took delivery of one Boeing 737 MAX 9 aircraft.

In October, CPA further took delivery of one Boeing 737 MAX 9 and anticipated receiving one additional aircraft in November. This shall end CPA’s 2022 with a total fleet of 97 aircraft.

Copa Holdings anticipates an operating margin of almost 22% for fourth-quarter 2022. CPA expects capacity to be 6.5 billion ASMs, up 6% from fourth-quarter 2019 capacity. The load factor is estimated to be around 88% in the December quarter. The fuel price is estimated to be $3.75 per gallon.

For 2023, CPA anticipates increasing its capacity by nearly 15% from 2022.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

The consensus estimate has shifted 38.53% due to these changes.

VGM Scores

Currently, Copa Holdings has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Copa Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Copa Holdings is part of the Zacks Transportation - Airline industry. Over the past month, Ryanair (RYAAY Quick QuoteRYAAY - Free Report) , a stock from the same industry, has gained 5.3%. The company reported its results for the quarter ended September 2022 more than a month ago.

Ryanair reported revenues of $4.05 billion in the last reported quarter, representing a year-over-year change of +92.3%. EPS of $5.32 for the same period compares with $1.16 a year ago.

Ryanair is expected to post earnings of $0.69 per share for the current quarter, representing a year-over-year change of +243.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +23.4%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Ryanair. Also, the stock has a VGM Score of A.