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Copa Holdings (CPA) Q4 Earnings & Revenues Surpass Estimates
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Copa Holdings’ (CPA - Free Report) fourth-quarter 2023 earnings per share of $4.47 (excluding 8 cents from non-recurring items) surpassed the Zacks Consensus Estimate of $3.90 but declined 0.45% year over year. Revenues of $916.9 million beat the Zacks Consensus Estimate of $893.6 million and rose 2.96% year over year on the back of upbeat passenger revenues.
Passenger revenues (which contributed 95.9% to the top line) increased 3.2% from fourth-quarter 2022, owing to capacity increase. Cargo and mail revenues fell 2.1% to $26.53 million due to lower cargo yields. Other operating revenues were $11.04 million, declining 1.6% year over year.
On a consolidated basis, Copa’s traffic (measured in revenue passenger miles) grew 11.1% year over year and capacity (measured in available seat miles) increased 11%. As a result, the load factor (percentage of seats filled by passengers) increased 0.1 percentage points to 86.7% in the reported quarter.
Passenger revenue per available seat miles decreased 7.1% year over year to 12.2 cents. Additionally, revenue per available seat mile declined 7.3% to 12.7 cents. Cost per available seat mile dipped 6.3%. Excluding fuel, the metric fell 1.6%. The average fuel price per gallon slipped 12.7% to $3.07.
Total operating expenses increased 4% year over year to $698.05 million due to the decrease in fuel and, sales and distribution costs. Expenses on wages, salaries and other employee benefits rose 14%. Sales and distribution costs decreased 10.4%. Passenger servicing costs grew 23.7%. Flight operation costs increased 9%.
Copa Holdings exited the fourth quarter with cash and cash equivalents of $206.37 million compared with $122.42 million in December 2022. Total debt, including lease liabilities, was $1.7 billion, which is consistent with the previous year.
CPA ended fourth-quarter 2023 with a consolidated fleet of 106 aircraft, which comprises 67 Boeing 737-800s, 29 Boeing 737 MAX 9s, nine Boeing 737-700s, and one Boeing 737-800 freighter.
In January 2024, CPA suspended operations of 21 Boeing 737 MAX9 aircraft.
In February 2024, a quarterly dividend payment of $1.61 was approved by the board of directors of the company.
Further, CPA will make its first dividend payment of $1.61 per share on Mar 15, 2024, to all Class A and Class B shareholders of record as of Feb 29, 2024.
CPA’s management expects consolidated capacity to grow 10% year over year. Management anticipates an operating margin of 21-23%. The load factor is expected to be 86-87%. RASM is expected to be 12.2 cents. Non-fuel unit costs and fuel cost per gallon are anticipated to be 6 cents and $2.85 per gallon, respectively.
Notably, CPA’s 2024 guidance includes the financial impacts of the grounding of 21 MAX9 planes in January.
Performances of Other Transportation Companies in Q4
Southwest Airlines’ (LUV - Free Report) fourth-quarter 2023 EPS of 37 cents exceeded the Zacks Consensus Estimate of 11 cents. In the year-ago quarter, LUV incurred a loss of 38 cents per share.
LUV’s revenues were $6.82 billion, beating the Zacks Consensus Estimate of $6.74 billion and increasing 10.53% year over year. The uptick was due to healthy leisure demand and continued yield strength.
Delta Air Lines’ (DAL - Free Report) fourth-quarter 2023 earnings (excluding $1.88 from non-recurring items) of $1.28 per share comfortably beat the Zacks Consensus Estimate of $1.17. Earnings, however, declined 13.5% on a year-over-year basis due to high labor costs.
DAL’s revenues were $14.22 billion, missing the Zacks Consensus Estimate of $14.06 billion and increasing 5.87% year over year.
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Copa Holdings (CPA) Q4 Earnings & Revenues Surpass Estimates
Copa Holdings’ (CPA - Free Report) fourth-quarter 2023 earnings per share of $4.47 (excluding 8 cents from non-recurring items) surpassed the Zacks Consensus Estimate of $3.90 but declined 0.45% year over year. Revenues of $916.9 million beat the Zacks Consensus Estimate of $893.6 million and rose 2.96% year over year on the back of upbeat passenger revenues.
Passenger revenues (which contributed 95.9% to the top line) increased 3.2% from fourth-quarter 2022, owing to capacity increase. Cargo and mail revenues fell 2.1% to $26.53 million due to lower cargo yields. Other operating revenues were $11.04 million, declining 1.6% year over year.
On a consolidated basis, Copa’s traffic (measured in revenue passenger miles) grew 11.1% year over year and capacity (measured in available seat miles) increased 11%. As a result, the load factor (percentage of seats filled by passengers) increased 0.1 percentage points to 86.7% in the reported quarter.
Passenger revenue per available seat miles decreased 7.1% year over year to 12.2 cents. Additionally, revenue per available seat mile declined 7.3% to 12.7 cents. Cost per available seat mile dipped 6.3%. Excluding fuel, the metric fell 1.6%. The average fuel price per gallon slipped 12.7% to $3.07.
Total operating expenses increased 4% year over year to $698.05 million due to the decrease in fuel and, sales and distribution costs. Expenses on wages, salaries and other employee benefits rose 14%. Sales and distribution costs decreased 10.4%. Passenger servicing costs grew 23.7%. Flight operation costs increased 9%.
Copa Holdings exited the fourth quarter with cash and cash equivalents of $206.37 million compared with $122.42 million in December 2022. Total debt, including lease liabilities, was $1.7 billion, which is consistent with the previous year.
CPA ended fourth-quarter 2023 with a consolidated fleet of 106 aircraft, which comprises 67 Boeing 737-800s, 29 Boeing 737 MAX 9s, nine Boeing 737-700s, and one Boeing 737-800 freighter.
In January 2024, CPA suspended operations of 21 Boeing 737 MAX9 aircraft.
In February 2024, a quarterly dividend payment of $1.61 was approved by the board of directors of the company.
Further, CPA will make its first dividend payment of $1.61 per share on Mar 15, 2024, to all Class A and Class B shareholders of record as of Feb 29, 2024.
Currently, Copa Holdings carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2024 Outlook
CPA’s management expects consolidated capacity to grow 10% year over year. Management anticipates an operating margin of 21-23%. The load factor is expected to be 86-87%. RASM is expected to be 12.2 cents. Non-fuel unit costs and fuel cost per gallon are anticipated to be 6 cents and $2.85 per gallon, respectively.
Notably, CPA’s 2024 guidance includes the financial impacts of the grounding of 21 MAX9 planes in January.
Performances of Other Transportation Companies in Q4
Southwest Airlines’ (LUV - Free Report) fourth-quarter 2023 EPS of 37 cents exceeded the Zacks Consensus Estimate of 11 cents. In the year-ago quarter, LUV incurred a loss of 38 cents per share.
LUV’s revenues were $6.82 billion, beating the Zacks Consensus Estimate of $6.74 billion and increasing 10.53% year over year. The uptick was due to healthy leisure demand and continued yield strength.
Delta Air Lines’ (DAL - Free Report) fourth-quarter 2023 earnings (excluding $1.88 from non-recurring items) of $1.28 per share comfortably beat the Zacks Consensus Estimate of $1.17. Earnings, however, declined 13.5% on a year-over-year basis due to high labor costs.
DAL’s revenues were $14.22 billion, missing the Zacks Consensus Estimate of $14.06 billion and increasing 5.87% year over year.