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Gol Linhas (GOL) Q3 Earnings Top on Solid Passenger Revenues
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Gol Linhas Aereas Inteligentes S.A.'s earnings (excluding 65 cents from non-recurring items) of 34 cents per share in the third quarter of 2019 surpassed the Zacks Consensus Estimate of 32 cents. The company reported a loss in the year-ago period. This marks the company’s 13th straight quarter of positive operating results. However, results were partly affected by 4% depreciation of the Brazilian real against the US dollar.
Meanwhile, net revenues of $936 million (R$3.71 billion) missed the Zacks Consensus Estimate of $938.4 million but increased significantly year over year owing to solid demand in the corporate segment and capacity discipline. Passenger revenues accounting for bulk (94.4%) of the top line improved 29.5% on a year-over-year basis.
Operational Statistics
Consolidated revenue passenger kilometers (RPK) — measure for revenues generated per kilometer per passenger — increased 12.8% year over year. The metric climbed 7.5% and 63.3% each on the domestic and international front.
Consolidated available seat kilometers (ASK), measuring an airline's passenger carrying capacity, rose 7.6% year over year. While domestic capacity inched up 3%, international capacity expanded 46.1%.
Furthermore, the company’s total load factor (percentage of seats filled with passengers) was 82.9% compared with 79.1% in the year-ago period. The metric improved as traffic growth outpaced capacity expansion.
While net passenger revenue per ASK augmented 20.4%, net revenue per ASK grew 19.2%. Fuel price per liter dipped 1.1%. However, cost per ASK rose 5.8% year over year due to higher depreciation, personnel and passenger costs. Besides, the metric increased 14.2% excluding fuel.
Gol Linhas Aereas Inteligentes S.A. Price, Consensus and EPS Surprise
Gol Linhas, carrying a Zacks Rank #3 (Hold), exited the third quarter with total liquidity (including cash and cash equivalents, financial investments, restricted cash and accounts receivable) of R$4 billion, reflecting an increase of R$1 billion from the year-ago reported figure. Additionally, long-term debt totaled R$10.7 billion at the end of the reported quarter compared with R$10.61 billion in the year-ago period. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Total operating expenses escalated 21.5% year over year to R$3.1 billion. The metric excluding fuel surged 36.7% year over year. Meanwhile, total volume of departures ascended 7.3% and the number of seats increased 7.8%.
Q4 Outlook
The company anticipates non-recurring unit costs excluding fuel to rise approximately 4-6% year over year. Meanwhile, courtesy of strong passenger demand and solid revenues, Gol Linhas estimates net revenue per ASK to climb 5-7% in the fourth quarter.
2019 Outlook
GOL Linhas anticipates net revenues of approximately R$13.7 billion compared with R$13.5 billion expected previously. Further, earnings are envisioned to be 45 cents per share. Previously, the estimate was in the range of 80-95 cents. The Zacks Consensus Estimate for the same stands at 54 cents. For fuel price, the forecast is intact at R$2.9 per liter. However, the prediction for pre-tax margin has been decreased to 7% from 10% anticipated earlier.
Capital expenditures are still anticipated at R$700 million. The effective tax rate estimate has been reduced to 20% from 22% expected previously. The company’s expected fleet size at the end of the year is anticipated to be 126 (earlier expectation: 125-127). The prediction for capacity now stands at 9% compared with 9-11% projected earlier.
For average load factor, the forecast is 81% compared with 79-81% anticipated in the past. The EBITDA margin prediction has also been revised to 29% compared with 28% expected previously. However, EBIT margin is now expected to be 17% from 18% envisioned previously.
2020 View
For 2020, net revenues are still estimated at R$15.5 billion. Earnings are now expected between $1.40 and $1.65 per share. Previously, the estimate was in the range of $1.2-$1.5. Fuel price is now projected at R$3 per liter compared with R$3.1 estimated previously. The prediction for pre-tax margin has been increased to 13% from 12% expected previously.
Capital expenditures are reiterated at R$650 million. The effective tax rate estimate has been reduced to 15% from 22% expected previously. The company’s expected fleet size at the end of the year is anticipated to be 134-139 (earlier expectation: 131-136). The prediction for capacity now stands at 7-9% compared with 6-8% projected earlier.
For average load factor, the forecast is maintained at 80-82%. The EBITDA margin prediction has been revised to 30% compared with 29% expected previously. The forecast for EBIT margin remains intact at 19%.
Upcoming Releases
Investors interested in the broader Transportation sector are awaiting third-quarter earnings reports from key players like Expeditors International of Washington, Inc (EXPD - Free Report) , Air Lease Corporation (AL - Free Report) and Golar LNG Limited (GLNG - Free Report) . While Expeditors and Air Lease will announce third-quarter results on Nov 5 and Nov 7, respectively, Golar LNG will release the same on Nov 26.
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Gol Linhas (GOL) Q3 Earnings Top on Solid Passenger Revenues
Gol Linhas Aereas Inteligentes S.A.'s earnings (excluding 65 cents from non-recurring items) of 34 cents per share in the third quarter of 2019 surpassed the Zacks Consensus Estimate of 32 cents. The company reported a loss in the year-ago period. This marks the company’s 13th straight quarter of positive operating results. However, results were partly affected by 4% depreciation of the Brazilian real against the US dollar.
Meanwhile, net revenues of $936 million (R$3.71 billion) missed the Zacks Consensus Estimate of $938.4 million but increased significantly year over year owing to solid demand in the corporate segment and capacity discipline. Passenger revenues accounting for bulk (94.4%) of the top line improved 29.5% on a year-over-year basis.
Operational Statistics
Consolidated revenue passenger kilometers (RPK) — measure for revenues generated per kilometer per passenger — increased 12.8% year over year. The metric climbed 7.5% and 63.3% each on the domestic and international front.
Consolidated available seat kilometers (ASK), measuring an airline's passenger carrying capacity, rose 7.6% year over year. While domestic capacity inched up 3%, international capacity expanded 46.1%.
Furthermore, the company’s total load factor (percentage of seats filled with passengers) was 82.9% compared with 79.1% in the year-ago period. The metric improved as traffic growth outpaced capacity expansion.
While net passenger revenue per ASK augmented 20.4%, net revenue per ASK grew 19.2%. Fuel price per liter dipped 1.1%. However, cost per ASK rose 5.8% year over year due to higher depreciation, personnel and passenger costs. Besides, the metric increased 14.2% excluding fuel.
Gol Linhas Aereas Inteligentes S.A. Price, Consensus and EPS Surprise
Gol Linhas Aereas Inteligentes S.A. price-consensus-eps-surprise-chart | Gol Linhas Aereas Inteligentes S.A. Quote
Other Metrics
Gol Linhas, carrying a Zacks Rank #3 (Hold), exited the third quarter with total liquidity (including cash and cash equivalents, financial investments, restricted cash and accounts receivable) of R$4 billion, reflecting an increase of R$1 billion from the year-ago reported figure. Additionally, long-term debt totaled R$10.7 billion at the end of the reported quarter compared with R$10.61 billion in the year-ago period. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Total operating expenses escalated 21.5% year over year to R$3.1 billion. The metric excluding fuel surged 36.7% year over year. Meanwhile, total volume of departures ascended 7.3% and the number of seats increased 7.8%.
Q4 Outlook
The company anticipates non-recurring unit costs excluding fuel to rise approximately 4-6% year over year. Meanwhile, courtesy of strong passenger demand and solid revenues, Gol Linhas estimates net revenue per ASK to climb 5-7% in the fourth quarter.
2019 Outlook
GOL Linhas anticipates net revenues of approximately R$13.7 billion compared with R$13.5 billion expected previously. Further, earnings are envisioned to be 45 cents per share. Previously, the estimate was in the range of 80-95 cents. The Zacks Consensus Estimate for the same stands at 54 cents. For fuel price, the forecast is intact at R$2.9 per liter. However, the prediction for pre-tax margin has been decreased to 7% from 10% anticipated earlier.
Capital expenditures are still anticipated at R$700 million. The effective tax rate estimate has been reduced to 20% from 22% expected previously. The company’s expected fleet size at the end of the year is anticipated to be 126 (earlier expectation: 125-127). The prediction for capacity now stands at 9% compared with 9-11% projected earlier.
For average load factor, the forecast is 81% compared with 79-81% anticipated in the past. The EBITDA margin prediction has also been revised to 29% compared with 28% expected previously. However, EBIT margin is now expected to be 17% from 18% envisioned previously.
2020 View
For 2020, net revenues are still estimated at R$15.5 billion. Earnings are now expected between $1.40 and $1.65 per share. Previously, the estimate was in the range of $1.2-$1.5. Fuel price is now projected at R$3 per liter compared with R$3.1 estimated previously. The prediction for pre-tax margin has been increased to 13% from 12% expected previously.
Capital expenditures are reiterated at R$650 million. The effective tax rate estimate has been reduced to 15% from 22% expected previously. The company’s expected fleet size at the end of the year is anticipated to be 134-139 (earlier expectation: 131-136). The prediction for capacity now stands at 7-9% compared with 6-8% projected earlier.
For average load factor, the forecast is maintained at 80-82%. The EBITDA margin prediction has been revised to 30% compared with 29% expected previously. The forecast for EBIT margin remains intact at 19%.
Upcoming Releases
Investors interested in the broader Transportation sector are awaiting third-quarter earnings reports from key players like Expeditors International of Washington, Inc (EXPD - Free Report) , Air Lease Corporation (AL - Free Report) and Golar LNG Limited (GLNG - Free Report) . While Expeditors and Air Lease will announce third-quarter results on Nov 5 and Nov 7, respectively, Golar LNG will release the same on Nov 26.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>