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A month has gone by since the last earnings report for Copa Holdings (CPA). Shares have lost about 4.5% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Copa Holdings Beats on Q3 Earnings
Copa Holdings' third-quarter 2024 earnings per share of $3.50 surpassed the Zacks Consensus Estimate of $3.48 but declined 20.3% year over year. Revenues of $854.7 million lagged the Zacks Consensus Estimate of $860 million and fell by 1.5% year over year due to upbeat passenger revenues.
Passenger revenues (which contributed 95.8% to the top line) decreased 1.8% from the third quarter of 2023. The downside was mainly led by the last-minute suspension of flights between Panama and Venezuela at the end of July, weaker currencies in Latin America and increased industry capacity in the region. As a result, passenger yield declined 8.7% year over year.
Cargo and mail revenues grew 4.3% to $24.45 million due to higher volumes, partly offset by lower cargo yields. Other operating revenues were $11.88 million, up 8.3% year over year due to higher ConnectMiles revenues from non-air partners.
The operating margin declined 3.3 percentage points from the year-ago quarter.
CPA’s Other Financial Details
On a consolidated basis, Copa Holdings’ traffic (measured in revenue passenger miles) grew 7.6% year over year, and capacity (measured in available seat miles) increased 9.5% from the year-ago quarter. With traffic growth outpacing capacity expansion, the load factor (percentage of seats filled by passengers) decreased 1.6 percentage points to 86.2% in the reported quarter.
Passenger revenue per available seat miles dropped 10.3% year over year to 10.5 cents. Revenue per available seat mile (RASM) declined 10.1% to 11 cents. Cost per available seat mile dipped 6.2%. Excluding fuel, the metric fell 1.6%. The average fuel price per gallon fell by 13.3% to $2.60.
Total operating expenses increased 2.8% year over year to $681 million due to higher capacity, offset by lower sales, and distribution and fuel costs. Expenses on wages, salaries, benefits and other employee expenses rose 8.7% year over year, whereas maintenance, materials and repairs increased 18.1% year over year. Sales and distribution costs decreased 8% year over year, and fuel costs fell by 5.3% in the same period. Passenger servicing costs grew 13.3% from the year-ago quarter. Other operating and administrative expenses increased 15.2% from the third quarter of 2023.