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Gol Linhas (GOL) Q1 Earnings Rise, Q2 Revenues May Decline 70%
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Gol Linhas Aereas Inteligentes’ earnings of 20 cents per share (excluding $3.08 from non-recurring items) in first-quarter 2020 increased year over year on cost-saving initiatives.
Net operating revenues of $710.9 million missed the Zacks Consensus Estimate of $929.8 million and also declined year over year. Passenger revenues accounting for bulk (93.4%) of the top line declined 3% on a year-over-year basis due to a drop in air travel demand following the coronavirus pandemic. While operations remained largely unaffected in January and February, the company started feeling the heat of the global health peril since mid-March.
Meanwhile, cargo and other revenues rose 16.4%. The airline carried 8.3 million customers in the reported quarter, indicating a drop of 6.7% from the year-ago period.
Gol Linhas Aereas Inteligentes S.A. Price, Consensus and EPS Surprise
Consolidated revenue passenger kilometers (RPK) — measure for revenues generated per kilometer per passenger — were down 6.4% year over year. The metric declined 4.7% and 16% on the domestic and international front, respectively.
Consolidated available seat kilometers (ASK), measuring an airline's passenger carrying capacity, slipped 4.4% year over year. While domestic capacity dropped 3.1%, international capacity contracted 11.8%.
Furthermore, the company’s total load factor (percentage of seats filled with passengers) was 79.8% compared with 81.5% in the year-ago period. The metric deteriorated as traffic declined more than the amount of capacity contraction. Average yield per passenger fell 3.6%.
While net passenger revenue per ASK inched up 1.4%, net revenues per ASK grew 2.6%. Average fuel price per liter increased 1%. However, cost per ASK fell 13.3% year over year, primarily owing to gains from sale and leaseback operations. Moreover, the metric was down 24.2%, excluding fuel. Total operating expenses declined 21.5% year over year to R$2.1 billion.
Gol Linhas, carrying a Zacks Rank #3 (Hold), exited the quarter with total liquidity (including cash and cash equivalents, financial investments, restricted cash and accounts receivable) of R$4.2 billioncompared with R$3 billion at the end of the year-ago period. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This Latin American carrier generated operating cash flow of R$1.1 billion and repaid debt worth R$1.2 billion in the reported quarter. Additionally, long-term debt totaled R$11.95 billion at the end of the reported quarter, up 4.9% year over year.
Q2 & Q3 Outlook
Gol Linhas does not plan to operate on any of its international routes in the second quarter. As a result, total capacity is expected to fall approximately 80% in the period with 75% in domestic flights. With these capacity reductions, revenues are anticipated to decline 70% year over year to R$0.9 billion in the current quarter. The reduced capacity, low fuel consumption and cost-saving initiatives undertaken by the company are estimated to lead to an approximate 50% decline in total expenses.
With uncertainty surrounding the duration of the coronavirus pandemic, the company predicts a 70% year-over-year decline in third-quarter revenues as well.
Performance of Other Airline Stocks
Delta Air Lines (DAL - Free Report) incurred a loss of 51 cents (excluding 33 cents from non-recurring items) in the March quarter, narrower than the Zacks Consensus Estimate of a loss of 72 cents. In the year-ago quarter, the company reported earnings (on an adjusted basis) of 96 cents per share. Total revenues of $8,592 million lagged the Zacks Consensus Estimate of $9,637.5 million and also declined 18% year over year.
Southwest Airlines (LUV - Free Report) incurred loss of 15 cents per share (excluding 3 cents from non-recurring items) in the first quarter of 2020, narrower than the Zacks Consensus Estimate of 48 cents. In the year-ago quarter, the company reported earnings of 70 cents per share. The results reflect the coronavirus-induced drop in passenger demand. Meanwhile, operating revenues of $4,234 million lagged the Zacks Consensus Estimate of $4,397 million and also declined 17.8% year over year.
American Airlines (AAL - Free Report) incurred a loss (excluding $2.61 from non-recurring items) of $2.65 per share, comparing unfavorably with the Zacks Consensus Estimate of a loss of $2.16. The company reported earnings per share of 52 cents in the year-ago quarter. Results in first-quarter 2020 were hurt by the coronavirus-led drop in air-travel demand. Operating revenues of $8,515 million declined 19.6% year over year and also fell short of the Zacks Consensus Estimate of $9,146.7 million.
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Gol Linhas (GOL) Q1 Earnings Rise, Q2 Revenues May Decline 70%
Gol Linhas Aereas Inteligentes’ earnings of 20 cents per share (excluding $3.08 from non-recurring items) in first-quarter 2020 increased year over year on cost-saving initiatives.
Net operating revenues of $710.9 million missed the Zacks Consensus Estimate of $929.8 million and also declined year over year. Passenger revenues accounting for bulk (93.4%) of the top line declined 3% on a year-over-year basis due to a drop in air travel demand following the coronavirus pandemic. While operations remained largely unaffected in January and February, the company started feeling the heat of the global health peril since mid-March.
Meanwhile, cargo and other revenues rose 16.4%. The airline carried 8.3 million customers in the reported quarter, indicating a drop of 6.7% from the year-ago period.
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
Operational Statistics
Consolidated revenue passenger kilometers (RPK) — measure for revenues generated per kilometer per passenger — were down 6.4% year over year. The metric declined 4.7% and 16% on the domestic and international front, respectively.
Consolidated available seat kilometers (ASK), measuring an airline's passenger carrying capacity, slipped 4.4% year over year. While domestic capacity dropped 3.1%, international capacity contracted 11.8%.
Furthermore, the company’s total load factor (percentage of seats filled with passengers) was 79.8% compared with 81.5% in the year-ago period. The metric deteriorated as traffic declined more than the amount of capacity contraction. Average yield per passenger fell 3.6%.
While net passenger revenue per ASK inched up 1.4%, net revenues per ASK grew 2.6%. Average fuel price per liter increased 1%. However, cost per ASK fell 13.3% year over year, primarily owing to gains from sale and leaseback operations. Moreover, the metric was down 24.2%, excluding fuel. Total operating expenses declined 21.5% year over year to R$2.1 billion.
Gol Linhas, carrying a Zacks Rank #3 (Hold), exited the quarter with total liquidity (including cash and cash equivalents, financial investments, restricted cash and accounts receivable) of R$4.2 billioncompared with R$3 billion at the end of the year-ago period. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This Latin American carrier generated operating cash flow of R$1.1 billion and repaid debt worth R$1.2 billion in the reported quarter. Additionally, long-term debt totaled R$11.95 billion at the end of the reported quarter, up 4.9% year over year.
Q2 & Q3 Outlook
Gol Linhas does not plan to operate on any of its international routes in the second quarter. As a result, total capacity is expected to fall approximately 80% in the period with 75% in domestic flights. With these capacity reductions, revenues are anticipated to decline 70% year over year to R$0.9 billion in the current quarter. The reduced capacity, low fuel consumption and cost-saving initiatives undertaken by the company are estimated to lead to an approximate 50% decline in total expenses.
With uncertainty surrounding the duration of the coronavirus pandemic, the company predicts a 70% year-over-year decline in third-quarter revenues as well.
Performance of Other Airline Stocks
Delta Air Lines (DAL - Free Report) incurred a loss of 51 cents (excluding 33 cents from non-recurring items) in the March quarter, narrower than the Zacks Consensus Estimate of a loss of 72 cents. In the year-ago quarter, the company reported earnings (on an adjusted basis) of 96 cents per share. Total revenues of $8,592 million lagged the Zacks Consensus Estimate of $9,637.5 million and also declined 18% year over year.
Southwest Airlines (LUV - Free Report) incurred loss of 15 cents per share (excluding 3 cents from non-recurring items) in the first quarter of 2020, narrower than the Zacks Consensus Estimate of 48 cents. In the year-ago quarter, the company reported earnings of 70 cents per share. The results reflect the coronavirus-induced drop in passenger demand. Meanwhile, operating revenues of $4,234 million lagged the Zacks Consensus Estimate of $4,397 million and also declined 17.8% year over year.
American Airlines (AAL - Free Report) incurred a loss (excluding $2.61 from non-recurring items) of $2.65 per share, comparing unfavorably with the Zacks Consensus Estimate of a loss of $2.16. The company reported earnings per share of 52 cents in the year-ago quarter. Results in first-quarter 2020 were hurt by the coronavirus-led drop in air-travel demand. Operating revenues of $8,515 million declined 19.6% year over year and also fell short of the Zacks Consensus Estimate of $9,146.7 million.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>