Back to top

TAM Revs Up On Passenger Demand

Read MoreHide Full Article

On February 13, 2012, TAM S.A reported its financial results for the fourth quarter and fiscal 2011. The company reported a net income of R$95.5 million (US$53.4 million) in the quarter, down 36.4% from R$150.1 million (US$88.8million) in the year-ago quarter.

Earnings per share were recorded at R$0.6 per share (US$0.34 per ADR) compared with R$1.0 per share (US$0.59 per ADR) reported in the year-ago quarter.

For FY11, the company reported net loss of R$2.1(US$1.3 per ADR) per share versus earnings per share of R$4.1(US$2.3 per ADR) reported in fiscal 2010.

In the fourth quarter, net revenue was R$3,579.3 million (US$1,999.6 million), up 11% year over year and 7.8% sequentially. The year-over-year improvement was primarily due to rising passenger demand across the company’s domestic and international route network.

Passenger revenues and the overall cargo revenues in the fourth quarter reached R$ 2,712.6 million (US$1,515.4 million) and R$ 330.2 million (US$184.5 million), representing year-over-year growth of 12.4% and 11.6%, respectively.

For FY11, the company reported total revenue of R$ 13,555.8 million (US$8117.2 million) in the quarter, up 14.2% y/y.

Total operating expenses in the fourth quarter increased 9.1% year over year and 18.6% sequentially to R$ 3,281.4 million (US$1,833.2 million). Rising cost of fuel, personnel, marketing expenses and third party services continue to raise expenses for the company.

EBITDA in the fourth quarter was R$ 485.9 million (US$271.5 million), up 23.3% y/y, with a margin of 13.6% compared with 12.2% in the corresponding quarter of 2010.

For full-year 2011, EBITDA improved to R$1,707.4 million (US$1,022.4 million), up 1.8% year over year.

Exiting the fourth quarter, financial liability was recorded at R$1,998.0 million (US$1,057.1million) versus R$1,865.5 million (US$1,019.4 million) in the previous quarter. Cash and cash equivalents were recorded at R$650.1 million (US$344 million) versus R$515 million (US$281.4 million) in the prior-year quarter.

During the quarter, net cash generated from operating activities was R$ 535.8 million (US$321.1 million), up from R$227 million (US$134.3 million) recorded in the year-ago quarter. Purchases of property, plant and equipment were recorded at a negative R$57.4 million (US$32.1 million) compared with R$15.0 million (US$8.9 million), in the year-ago quarter.

TAM S.A., operating through its subsidiaries TAM Linhas Aéreas and TAM Mercosur, is a renowned air transportation services provider, both in the domestic and international markets. TAM competes directly with its peers, such as AMR Corporation (AMR) and GOL Linhas A (GOL - Free Report) .

The company holds a positive outlook for 2012, with an increase in seating capacity within Brazil as well as among international routes. Management targets a load factor between 72% and 74% in the domestic segment and between 83% and 85% in the international segment, which looks impressive.

Tam S.A has a Zacks #2 Rank, which translates into a short-term Buy rating (1-3 months).




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Gol Linhas Aereas Inteligentes S.A. (GOL) - free report >>


More from Zacks Analyst Blog

You May Like