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AZUL's Q2 Earnings & Revenues Miss Expectations, Rise Y/Y
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Azul (AZUL - Free Report) incurred a loss (excluding $1.52 from non-recurring items) of 81 cents per share in the second quarter of 2023, wider than the Zacks Consensus Estimate of a loss of 70 cents. Loss per share was 94 cents in second-quarter 2022.
Total revenues amounted to R$4,269.4 million ($862.7 million). The Zacks Consensus Estimate was pegged at $908.3 million. Despite this lag, the top line increased 7.8% year over year as air-travel demand has improved.
With more people taking to the skies, Azul’s passenger revenues, contributing 92.5% to the top line, increased 11% year over year (on higher total capacity). We estimated the metric to rise 16.5% year over year.
Cargo and other revenues declined 12.4% year over year. We projected a 1% year over year decline.
Consolidated traffic, measured in revenue passenger kilometers, jumped 10% (down 2.6% in domestic but up 93.8% on the international front) year over year. Consolidated available seat kilometers (ASK), measuring an airline's passenger-carrying capacity, grew 8.4% from the first quarter of 2022, with a 3.4% decline in domestic capacity and 95% rise in international capacity. Since traffic increase was more than capacity expansion, load factor (percentage of seats filled with passengers) climbed 1.2 percentage points to 79.9%.
Azul’s total revenues per ASK inched up 0.3% and passenger revenues per ASK rose 2.3% year over year. Cost per ASK (CASK) decreased 10.5% from the year-ago quarter’s reported figure to 38.89 cents. This was mainly stemmed from a fall in jet fuel prices apart from the company’s cost reduction initiatives and productivity gains.
Fuel cost per liter plunged 24.5% from the prior-year quarter’s reported figure. CASK, excluding fuel, grew 3.2% to 22.15 cents. Average fare gained 6% from second-quarter 2022 level.
AZUL exited the second quarter with total liquidity of R$5.5 billion. Gross debt tumbled R$1.1 billion sequentially to R$20.6 billion in the reported quarter, mainly due to appreciation of the Brazilian real.
American Airlines’ (AAL - Free Report) second-quarter 2023 earnings (excluding 4 cents from non-recurring items) of $1.92 per share easily beat the Zacks Consensus Estimate of $1.58. AAL’s results were aided by lower costs and higher revenues.
Operating revenues of $14,055 million rose 4.7% year over year. The top line beat the Zacks Consensus Estimate of $13,736.3 million.
Passenger revenues, accounting for 92.3% of the top line, increased to $12,978 million from $12,223 million a year ago. This was driven by strong air-travel demand, mainly on the domestic front. Demand was particularly strong in June on the back of growth in close-in bookings.
United Airlines (UAL - Free Report) reported second-quarter 2023 earnings per share of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues gained 17.1% year over year due to upbeat air-travel demand. The uptick was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.
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AZUL's Q2 Earnings & Revenues Miss Expectations, Rise Y/Y
Azul (AZUL - Free Report) incurred a loss (excluding $1.52 from non-recurring items) of 81 cents per share in the second quarter of 2023, wider than the Zacks Consensus Estimate of a loss of 70 cents. Loss per share was 94 cents in second-quarter 2022.
Total revenues amounted to R$4,269.4 million ($862.7 million). The Zacks Consensus Estimate was pegged at $908.3 million. Despite this lag, the top line increased 7.8% year over year as air-travel demand has improved.
With more people taking to the skies, Azul’s passenger revenues, contributing 92.5% to the top line, increased 11% year over year (on higher total capacity). We estimated the metric to rise 16.5% year over year.
Cargo and other revenues declined 12.4% year over year. We projected a 1% year over year decline.
Consolidated traffic, measured in revenue passenger kilometers, jumped 10% (down 2.6% in domestic but up 93.8% on the international front) year over year. Consolidated available seat kilometers (ASK), measuring an airline's passenger-carrying capacity, grew 8.4% from the first quarter of 2022, with a 3.4% decline in domestic capacity and 95% rise in international capacity. Since traffic increase was more than capacity expansion, load factor (percentage of seats filled with passengers) climbed 1.2 percentage points to 79.9%.
Azul’s total revenues per ASK inched up 0.3% and passenger revenues per ASK rose 2.3% year over year. Cost per ASK (CASK) decreased 10.5% from the year-ago quarter’s reported figure to 38.89 cents. This was mainly stemmed from a fall in jet fuel prices apart from the company’s cost reduction initiatives and productivity gains.
Fuel cost per liter plunged 24.5% from the prior-year quarter’s reported figure. CASK, excluding fuel, grew 3.2% to 22.15 cents. Average fare gained 6% from second-quarter 2022 level.
AZUL exited the second quarter with total liquidity of R$5.5 billion. Gross debt tumbled R$1.1 billion sequentially to R$20.6 billion in the reported quarter, mainly due to appreciation of the Brazilian real.
Currently, Azul carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A Sneak Peek Into Other Notable Airlines’ Results
American Airlines’ (AAL - Free Report) second-quarter 2023 earnings (excluding 4 cents from non-recurring items) of $1.92 per share easily beat the Zacks Consensus Estimate of $1.58. AAL’s results were aided by lower costs and higher revenues.
Operating revenues of $14,055 million rose 4.7% year over year. The top line beat the Zacks Consensus Estimate of $13,736.3 million.
Passenger revenues, accounting for 92.3% of the top line, increased to $12,978 million from $12,223 million a year ago. This was driven by strong air-travel demand, mainly on the domestic front. Demand was particularly strong in June on the back of growth in close-in bookings.
United Airlines (UAL - Free Report) reported second-quarter 2023 earnings per share of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues gained 17.1% year over year due to upbeat air-travel demand. The uptick was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.