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Copa Holdings (CPA) Q2 Earnings Lag Estimates, Plunge Y/Y

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Copa Holdings, S.A. (CPA - Free Report) put up a disappointing performance in the second quarter of 2018 with lower-than-expected earnings and revenues. The company’s earnings per share of $1.18 missed the Zacks Consensus Estimate of $1.28. Moreover, the bottom line plunged significantly year over year. Results were perhaps hurt by the Panama-Venezuela row, which caused several flight cancellations in April.

Quarterly revenues though increased substantially to $634.1 million fell short of the consensus mark of $652.8 million. This year-over-year improvement in the top line was primarily owing to 10.5% growth in passenger revenues.

The earnings and revenue miss displeased investors. Consequently, the stock declined 6.3% in after-hours trading on Aug 8.

Copa Holdings, S.A. Price, Consensus and EPS Surprise

 

Copa Holdings, S.A. Price, Consensus and EPS Surprise | Copa Holdings, S.A. Quote

Operational Statistics

While passenger unit revenue per available seat mile (PRASM) slipped 0.7%, yield per passenger mile dipped 2.2%. Passenger traffic (on a consolidated basis) rose 13% and capacity was up 11.2% in second-quarter 2018. Load factor expanded 130 basis points to 83.5% as traffic rise outweighed capacity growth.

Additionally, unit revenue per available seat mile (RASM) slid 0.6%. Operating cost per available seat mile (CASM) rose 4.8% in the reported quarter, primarily due to higher fuel costs. However, the metric excluding fuel declined 5.1%. Cost-cutting efforts among other factors led to this upside. Average fuel price per gallon surged 32.9% year over year to $2.35.

Dividend

The company’s board has approved a quarterly cash dividend of 87 cents per share, payable Sep 14 to shareholders of record as of Aug 31.

Financials

Copa Holdings exited the second quarter with cash and cash equivalents of $225.33 million compared with $238.79 million at the end of 2017. Additionally, long-term debt totaled $914.07 million at the end of the second quarter compared with $876.12 million at the end of December 2017.

Zacks Rank & Key Picks

The company carries a Zacks Rank #5 (Sell).

Some better-ranked stocks in the broader Transportation sector are SkyWest, Inc. (SKYW - Free Report) , GATX Corporation (GATX - Free Report) and Trinity Industries, Inc. (TRN - Free Report) . While GATX holds a Zacks Rank #2 (Buy), SkyWest and Trinity sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Shares of SkyWest, GATX and Trinity have surged more than 63%, 35% and 32%, respectively, in a year.

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