Latin American carrier Copa Holdings, S.A. (CPA - Free Report) revealed impressive traffic numbers for the month of October. Traffic – measured in revenue passenger miles (RPMs) – improved 13.7% on a year-over-year basis to 1.5 billion.
Consolidated capacity (available seat miles/ASMs) inched up 1.4% to 1.8 billion in the month. Another important metric, load factor – the percentage of seats filled by passengers – increased 900 basis points (bps) to 83.3%. This was because traffic growth outpaced capacity expansion in the month.
In the first ten months of 2016, Copa Holdings recorded 8.1% growth in RPMs to 14.6 billion, while ASMs climbed 1.4% to 18.2 billion, both on a year-over-year basis. Also, load factor improved 500 bps to 80.3%. We note that the Olympic games held in Brazil earlier in the year boosted traffic at Copa Holdings.
Copa Holdings, which competes with the likes of GOL Linhas (GOL - Free Report) and LATAM Airlines Group S.A. (LFL - Free Report) in the Latin American market, has performed well this so far year and its impressive October traffic report adds to the list of its impressive performances. The carrier’s strong performance this year can be gauged from the fact that the stock has appreciated over 76% on a year-to-date basis.
The carrier has an impressive earnings history. It outpaced the Zacks Consensus Estimate in three of the last four quarters with an average beat of 38.55%.
In the third quarter of 2016 too the company topped earnings expectations as well as surpassed revenue estimates. The carrier’s third-quarter earnings (on an adjusted basis) of $1.30 per share beat the Zacks Consensus Estimate by 2 cents. Earnings were also significantly above the year-ago figure of 85 cents. Quarterly revenues improved 4% on a year-over-year basis to $569 million. Revenues also beat the Zacks Consensus Estimate of $545 million. The year-over-year increase in the top line was primarily due to a 4.1% improvement in passenger revenues
Earnings estimates too have been moving up for the carrier for quite some time and the strong third-quarter earnings report has further augmented analysts’ bullish stance on the stock. The Zacks Consensus Estimate for full-year 2016 has increased 11 cents over the last month to $4.68 per share. All these positives have contributed to Copa Holdings’ a Zacks Rank #1 (Strong Buy). The only other airline stock currently sporting the same Zacks Rank as Copa Holdings is the German carrier, Lufthansa (DLAKY - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>