A month has gone by since the last earnings report for Copa Holdings (CPA - Free Report) . Shares have lost about 9.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Copa Holdings due for a breakout? 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 catalysts. <p style="text-align: justify;"><strong>Copa Holdings Q2 Earnings Miss Estimates, Down Y/Y</strong></p><p style="text-align: justify;">Copa 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.<br /><br />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.<br /><br /><strong>Operational Statistics</strong><br /><br />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.<br /><br />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.<br /><br /><strong>Dividend</strong><br /><br />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.<br /><br /><strong>Financials</strong><br /><br />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.</p>
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 -25.27% due to these changes.
At this time, Copa Holdings has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Copa Holdings has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.