LUV Stock – Copa Holdings (CPA) Incurs Narrower-Than-Expected Loss in Q1
Copa Holdings CPA incurred a loss (excluding 37 cents from non-recurring items) of $2.23 per share in the first quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $2.25. In the year-ago period, the company reported earnings of $1.75. Results were hurt by coronavirus-induced limited flight operations. The company’s flight operations were only 39% of the 2019 (pre-pandemic) level in the quarter.
Quarterly revenues of $185.7 million missed the Zacks Consensus Estimate of $188.9 million and also plunged 68.8% year over year, with passenger revenues (contributed 93.2% to the top line) declining 69.9%.
On a consolidated basis, traffic (measured in revenue passenger miles or RPMs) fell 61.6% and capacity (measured in available seat miles/ASMs) declined 54.8%. As traffic decline was more than the amount of capacity contraction, load factor (% of seats filled with passengers) contracted 12.3 percentage points to 69.2% in the reported quarter. Passenger revenue per available seat miles decreased 33.3% year over year to 7 cents. Additionally, total revenue per available seat mile slipped 31% to 7.5 cents. Cost per available seat mile jumped 17.1% year over year. Excluding fuel, the metric surged 30.1%.
Total operating expenses declined 47.1% year over year to $262.76 million, backed by lower passenger servicing and fuel cost. Expenses on fuel fell 62.5% due to reduced fuel consumption (down 58.5% year over year to 29.08 million) and low jet fuel prices ($1.75, down 9.9%). Expenses on passenger servicing declined 74.5% on a year-over-year basis. Moreover, expenses on wages, salaries and other employee benefits dropped 50.5% due to reduced payroll expenses, voluntary temporary leaves and less variable compensation provisions.
Copa Holdings, S.A. price, Consensus and EPS Surprise
Copa Holdings, S.A. price-consensus-eps-surprise-chart | Copa Holdings, S.A. Quote
Copa Holdings exited the first quarter with cash and cash equivalents of $193.8 million compared with $119.10 million at the end of 2020. Total debt, including lease liabilities, was $1.7 billion at the end of the first quarter.
This Zacks Rank #4 (Sell) company ended the first quarter with a consolidated fleet of 81 aircraft — 68 Boeing 737-800s and 13 Boeing 737 MAX 9s. During the quarter, the company took delivery of 6 Boeing 737 MAX 9. Additionally, the company sold 4 Embraer 190 aircraft to a third party as was previously agreed upon.
Copa Holdings expects its capacity to reach approximately 2.9 billion in the second quarter. This represents around 45% of second-quarter 2019 levels. The company anticipates total revenues of $260 million in the quarter, which is 40% of second-quarter 2019 revenues. Cash consumption, excluding proceeds from asset sales and extraordinary financing activities, is estimated between $10 million and $15 million per month in the period.
Performance of Other Airline Stocks
United Airlines UAL, carrying a Zacks Rank #4, incurred a loss (excluding $3.21 from non-recurring items) of $7.5 per share in the first quarter of 2021, wider than the Zacks Consensus Estimate of a loss of $6.97. Operating revenues of $3,221 million also fell short of the Zacks Consensus Estimate of $3,253.1 million.
Southwest Airlines LUV, carrying a Zacks Rank #3 (Hold), incurred a loss of $1.72 per share (excluding $1.91 from non-recurring items) in the first quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $1.82. Meanwhile, operating revenues of $2,052 million surpassed the Zacks Consensus Estimate of $2,031.7 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alaska Air Group ALK, carrying a Zacks Rank #3, incurred a loss (excluding $2.46 from non-recurring items) of $3.51 per share in the first quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $3.71. Moreover, revenues of $797 million surpassed the Zacks Consensus Estimate of $787.1 million.
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