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Why Is Copa Holdings (CPA) Up 0.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Copa Holdings (CPA - Free Report) . Shares have added about 0.1% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important drivers.
Copa Holdings Beats on Q4 Earnings
Copa Holdings’ 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -12.75% due to these changes.
VGM Scores
Currently, Copa Holdings has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Copa Holdings has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Copa Holdings belongs to the Zacks Transportation - Airline industry. Another stock from the same industry, Ryanair (RYAAY - Free Report) , has gained 2.1% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Ryanair reported revenues of $2.91 billion in the last reported quarter, representing a year-over-year change of +23.1%. EPS of $0.07 for the same period compares with $0.95 a year ago.
Ryanair is expected to post a loss of $1.31 per share for the current quarter, representing a year-over-year change of -79.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +4.8%.
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 C.
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Why Is Copa Holdings (CPA) Up 0.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Copa Holdings (CPA - Free Report) . Shares have added about 0.1% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important drivers.
Copa Holdings Beats on Q4 Earnings
Copa Holdings’ 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -12.75% due to these changes.
VGM Scores
Currently, Copa Holdings has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Copa Holdings has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Copa Holdings belongs to the Zacks Transportation - Airline industry. Another stock from the same industry, Ryanair (RYAAY - Free Report) , has gained 2.1% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Ryanair reported revenues of $2.91 billion in the last reported quarter, representing a year-over-year change of +23.1%. EPS of $0.07 for the same period compares with $0.95 a year ago.
Ryanair is expected to post a loss of $1.31 per share for the current quarter, representing a year-over-year change of -79.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +4.8%.
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 C.