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Copa Holdings (CPA) Gears up for Q4 Earnings: What's in Store?

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Copa Holdings (CPA - Free Report) is scheduled to report its fourth-quarter 2023 results on Feb 7, after market close.

The Zacks Consensus Estimate for CPA’s fourth-quarter 2023 earnings has been revised 0.26% upward over the past 60 days to $3.88 per share. The company has surpassed the consensus mark in each of the preceding four quarters, the average beat being 16.81%.

Copa Holdings, S.A. Price and EPS Surprise

 

Copa Holdings, S.A. Price and EPS Surprise

Copa Holdings, S.A. price-eps-surprise | Copa Holdings, S.A. Quote

Let us analyze the factors that are likely to have impacted the company’s quarterly performance in the quarter under review.

We expect the rise in air travel demand, especially on the domestic front, to have boosted CPA’s top-line performance. Passenger revenues, which account for the bulk of the top line, are likely to have driven total revenues. Our estimate for passenger revenues is $852.5 million, indicating a 2.3% sequential increase.

The rise in air travel demand is likely to cause traffic (measured in revenue passenger miles) to rise 10.7% year over year, per our estimate. CPA is expanding its capacity to meet the surge in demand. We estimate year-over-year capacity (measured in available seat miles) growth of 9.7%.

High fuel costs are anticipated to have affected the company’s bottom-line performance in the quarter under review. Even though oil prices have come down from the highs witnessed earlier, the same has still been high. We expect the average price per gallon of fuel to be $3.06, above the $3 per gallon reported in third-quarter 2023.

What our model says

Our proven model does not predict an earnings beat for Copa Holdings. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

CPA has an Earnings ESP of -2.00%. While the Most Accurate Estimate is pegged at $3.80, the Zacks Consensus Estimate is pinned at $3.88. The company currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Highlights of Q3

Copa Holdings’ third-quarter 2023 earnings of $4.39 per share exceeded the Zacks Consensus Estimate of $3.61. Passenger revenues of $833.3 million beat the Zacks Consensus Estimate of $816.5 million, marking a 7.6% year-over-year rise.

Stocks to Consider

Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings this time around.

ArcBest (ARCB - Free Report) currently has an Earnings ESP of +1.37% and a Zacks Rank #3. ARCB will report its fourth-quarter 2023 earnings results on Feb 6.

The surge in e-commerce activities, automation and inclination toward sustainability will likely provide a positive impetus to ARCB’s fourth-quarter results.

TFI International (TFII - Free Report) currently has an Earnings ESP of +1.61% and carries a Zacks Rank #3. TFII is set to report its fourth-quarter 2023 earnings results on Feb 8.

The rapid expansion of TFII’s operations in North America should aid its results in the quarter under evaluation.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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