U.S. markets open in 1 hour 56 minutes
  • S&P Futures

    4,210.00
    -12.25 (-0.29%)
     
  • Dow Futures

    33,658.00
    -147.00 (-0.43%)
     
  • Nasdaq Futures

    14,159.00
    -6.50 (-0.05%)
     
  • Russell 2000 Futures

    2,268.50
    -16.00 (-0.70%)
     
  • Crude Oil

    70.65
    -0.39 (-0.55%)
     
  • Gold

    1,793.50
    +18.70 (+1.05%)
     
  • Silver

    26.45
    +0.59 (+2.30%)
     
  • EUR/USD

    1.1915
    +0.0004 (+0.04%)
     
  • 10-Yr Bond

    1.5110
    0.0000 (0.00%)
     
  • Vix

    18.68
    +0.53 (+2.92%)
     
  • GBP/USD

    1.3894
    -0.0031 (-0.22%)
     
  • USD/JPY

    110.1620
    -0.0690 (-0.06%)
     
  • BTC-USD

    37,758.51
    -1,447.09 (-3.69%)
     
  • CMC Crypto 200

    934.36
    -35.52 (-3.66%)
     
  • FTSE 100

    7,074.15
    -79.28 (-1.11%)
     
  • Nikkei 225

    28,964.08
    -54.25 (-0.19%)
     

Azul's (AZUL) Q3 Loss Wider Than Expected, Revenues Lag

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Azul AZUL incurred a loss (excluding a penny from non-recurring items) of $1.99 per share in the third quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $1.05. In the year-ago period, the company had reported adjusted earnings of 92 cents per share. The third-quarter results were affected by coronavirus-induced drop in demand and depreciation of the Brazilian real.

Moreover, total revenues of $149.8 million missed the Zacks Consensus Estimate of $165 million. The top line also declined more than 70% year over year with passenger revenues (accounted for 77.5% of the top line) plunging 78.4% due to the coronavirus-led weak air-travel demand. Cargo and other revenues surged 26.6% year over year primarily due to strong e-commerce growth.

AZUL SA Price, Consensus and EPS Surprise

 

AZUL SA Price, Consensus and EPS Surprise
AZUL SA Price, Consensus and EPS Surprise

AZUL SA price-consensus-eps-surprise-chart | AZUL SA Quote

Operational Statistics

Consolidated revenue passenger kilometers (“RPK”), measuring revenues generated per kilometer per passenger, fell 69% year over year. The metric declined 62.3% domestically and 89.6% internationally.

Consolidated available seat kilometers (“ASK”), measuring an airline's passenger-carrying capacity, decreased 66.6% year over year. While domestic capacity dropped 60.1%, international capacity contracted 88%.

With traffic declining more than the amount of capacity contraction, consolidated load factor (percentage of seats filled with passengers) deteriorated 590 basis points to 78.4%.

While total revenues per ASK, or RASK, decreased 20.3%, passenger revenues per ASK, or PRASK, fell 35.2%. Meanwhile, cost per ASK (“CASK”) soared 78.6% on 35.4% depreciation in the Brazilian real. Jet fuel prices declined 12.6% year over year. CASK, excluding fuel, augmented more than 100%. Average fare decreased 33% from the year-ago quarter’s figure.

Azul exited the third quarter with total passenger operating fleet of 139 aircraft. The average age of the fleet was 6 years. Contractual fleet size was 165.

Liquidity

Azul, carrying a Zacks Rank #4 (Sell), exited the third quarter with total liquidity of R$6.95 billion, up 4.6% year over year. Additionally, total debt decreased 4.8% to R$18 billion from the June-end figure due to 7.5% reduction in lease liabilities.

Outlook

With air-travel demand steadily recovering in Brazil, Azul expects its domestic capacity to be more than 80% of the 2019 level in December. Meanwhile total capacity is anticipated to be approximately 70% of the 2019 level in the same month. This compares with a capacity of around 60% of the year-ago level estimated previously. By the end of 2020, the airline plans to operate in 113 destinations, thus resuming services on 97% of its network.

The company forecasts average daily cash burn to be R$1.5 million in the fourth quarter of 2020. Previously it expected the same to be R$2.5 million.

Performance of Other Airline Stocks

Spirit Airlines Inc. SAVE, carrying a Zacks Rank #3 (Hold), incurred a loss of $2.32 per share (excluding $1.25 from non-recurring items) in the June quarter, narrower than the Zacks Consensus Estimate of a loss of $2.63. Meanwhile, operating revenues of $401.9 million beat the Zacks Consensus Estimate of $384.7 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Southwest Airlines Co. LUV, carrying a Zacks Rank #3, incurred a loss of $1.99 per share (excluding 3 cents from non-recurring items) in the third quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of $2.44. Moreover, operating revenues of $1,793 million surpassed the Zacks Consensus Estimate of $1,678.2 million.

SkyWest Inc SKYW, carrying a Zacks Rank #4, reported earnings of 66 cents per share, surpassing the Zacks Consensus Estimate of 9 cents. Quarterly revenues of $457.5 million surpassed the Zacks Consensus Estimate of $426.8 million.

Legal Marijuana: An Investor’s Dream

Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.

Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.

Download Marijuana Moneymakers FREE >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Southwest Airlines Co. (LUV) : Free Stock Analysis Report
 
SkyWest, Inc. (SKYW) : Free Stock Analysis Report
 
Spirit Airlines, Inc. (SAVE) : Free Stock Analysis Report
 
AZUL SA (AZUL) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research