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Copa Holdings (CPA) Down 4.4% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Copa Holdings (CPA - Free Report) . Shares have lost about 4.4% 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 its most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat at Copa Holdings in Q3
Copa Holdings’ earnings of $2.45 per share surpassed the Zacks Consensus Estimate by 14 cents. Moreover, the bottom line soared 80.2% year over year on higher revenues and low fuel costs. Quarterly revenues also increased 5.3% to $708.2 million, above the Zacks Consensus Estimate of $701 million. This upside was owing to a 5.6% increase in passenger revenues. Notably, passenger revenues accounted for bulk of the top line (96.8%) in the September quarter.
Operational Statistics
While passenger unit revenue per available seat mile (PRASM) ascended 9.7%, yield per passenger mile rose 7.9%. However, on a consolidated basis, traffic (measured in revenue passenger miles or RPMs) dipped 2.2% while capacity (or available seat miles/ASMs) slid 3.7% (due to the MAX groundings) in the reported quarter. As capacity decline was more than the contraction in traffic, consolidated load factor (% of seats filled with passengers) improved 140 basis points (bps) to 85.6%.
Meanwhile, unit revenue per available seat mile (RASM) augmented 9.4%. However, operating cost per available seat mile (CASM) inched up 0.5% in the reported quarter. The metric excluding fuel costs increased 5.5% on account of lower capacity due to the grounding of the MAX fleet. Meanwhile, average fuel price per gallon declined 10.2% year over year to $2.16. With the ongoing groundings, the company removed all MAX flights from its schedule through mid-February 2020.
Liquidity
The company exited the third quarter with cash and cash equivalents of $225.28 million compared with $156.16 million at 2018 end. Long-term debt declined to $965.5 from $975.28 million at the end of 2018.
Dividend Update
The company’s board cleared a quarterly cash dividend of 65 cents per share, payable Dec 13, 2019 to its shareholders of record as of Nov 29.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Copa Holdings has a great Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile 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 upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Copa Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Copa Holdings (CPA) Down 4.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Copa Holdings (CPA - Free Report) . Shares have lost about 4.4% 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 its most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat at Copa Holdings in Q3
Copa Holdings’ earnings of $2.45 per share surpassed the Zacks Consensus Estimate by 14 cents. Moreover, the bottom line soared 80.2% year over year on higher revenues and low fuel costs. Quarterly revenues also increased 5.3% to $708.2 million, above the Zacks Consensus Estimate of $701 million. This upside was owing to a 5.6% increase in passenger revenues. Notably, passenger revenues accounted for bulk of the top line (96.8%) in the September quarter.
Operational Statistics
While passenger unit revenue per available seat mile (PRASM) ascended 9.7%, yield per passenger mile rose 7.9%. However, on a consolidated basis, traffic (measured in revenue passenger miles or RPMs) dipped 2.2% while capacity (or available seat miles/ASMs) slid 3.7% (due to the MAX groundings) in the reported quarter. As capacity decline was more than the contraction in traffic, consolidated load factor (% of seats filled with passengers) improved 140 basis points (bps) to 85.6%.
Meanwhile, unit revenue per available seat mile (RASM) augmented 9.4%. However, operating cost per available seat mile (CASM) inched up 0.5% in the reported quarter. The metric excluding fuel costs increased 5.5% on account of lower capacity due to the grounding of the MAX fleet. Meanwhile, average fuel price per gallon declined 10.2% year over year to $2.16. With the ongoing groundings, the company removed all MAX flights from its schedule through mid-February 2020.
Liquidity
The company exited the third quarter with cash and cash equivalents of $225.28 million compared with $156.16 million at 2018 end. Long-term debt declined to $965.5 from $975.28 million at the end of 2018.
Dividend Update
The company’s board cleared a quarterly cash dividend of 65 cents per share, payable Dec 13, 2019 to its shareholders of record as of Nov 29.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Copa Holdings has a great Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile 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 upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Copa Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.