Copa Holdings (CPA) Q4 Earnings & Revenues Surpass Estimates
Copa Holdings’ CPA fourth-quarter 2023 earnings per share of $4.47 (excluding 8 cents from non-recurring items) surpassed the Zacks Consensus Estimate of $3.90 but declined 0.45% year over year. Revenues of $916.9 million beat the Zacks Consensus Estimate of $893.6 million and rose 2.96% year over year on the back of upbeat passenger revenues.
Passenger revenues (which contributed 95.9% to the top line) increased 3.2% from fourth-quarter 2022, owing to capacity increase. Cargo and mail revenues fell 2.1% to $26.53 million due to lower cargo yields. Other operating revenues were $11.04 million, declining 1.6% year over year.
On a consolidated basis, Copa’s traffic (measured in revenue passenger miles) grew 11.1% year over year and capacity (measured in available seat miles) increased 11%. As a result, the load factor (percentage of seats filled by passengers) increased 0.1 percentage points to 86.7% in the reported quarter.
Passenger revenue per available seat miles decreased 7.1% year over year to 12.2 cents. Additionally, revenue per available seat mile declined 7.3% to 12.7 cents. Cost per available seat mile dipped 6.3%. Excluding fuel, the metric fell 1.6%. The average fuel price per gallon slipped 12.7% to $3.07.
Total operating expenses increased 4% year over year to $698.05 million due to the decrease in fuel and, sales and distribution costs. Expenses on wages, salaries and other employee benefits rose 14%. Sales and distribution costs decreased 10.4%. Passenger servicing costs grew 23.7%. Flight operation costs increased 9%.
Copa Holdings exited the fourth quarter with cash and cash equivalents of $206.37 million compared with $122.42 million in December 2022. Total debt, including lease liabilities, was $1.7 billion, which is consistent with the previous year.
CPA ended fourth-quarter 2023 with a consolidated fleet of 106 aircraft, which comprises 67 Boeing 737-800s, 29 Boeing 737 MAX 9s, nine Boeing 737-700s, and one Boeing 737-800 freighter.
In January 2024, CPA suspended operations of 21 Boeing 737 MAX9 aircraft.
In February 2024, a quarterly dividend payment of $1.61 was approved by the board of directors of the company.
Further, CPA will make its first dividend payment of $1.61 per share on Mar 15, 2024, to all Class A and Class B shareholders of record as of Feb 29, 2024.
Currently, Copa Holdings carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2024 Outlook
CPA’s management expects consolidated capacity to grow 10% year over year. Management anticipates an operating margin of 21-23%. The load factor is expected to be 86-87%. RASM is expected to be 12.2 cents. Non-fuel unit costs and fuel cost per gallon are anticipated to be 6 cents and $2.85 per gallon, respectively.
Notably, CPA’s 2024 guidance includes the financial impacts of the grounding of 21 MAX9 planes in January.
Performances of Other Transportation Companies in Q4
Southwest Airlines’ LUV fourth-quarter 2023 EPS of 37 cents exceeded the Zacks Consensus Estimate of 11 cents. In the year-ago quarter, LUV incurred a loss of 38 cents per share.
LUV’s revenues were $6.82 billion, beating the Zacks Consensus Estimate of $6.74 billion and increasing 10.53% year over year. The uptick was due to healthy leisure demand and continued yield strength.
Delta Air Lines’ DAL fourth-quarter 2023 earnings (excluding $1.88 from non-recurring items) of $1.28 per share comfortably beat the Zacks Consensus Estimate of $1.17. Earnings, however, declined 13.5% on a year-over-year basis due to high labor costs.
DAL’s revenues were $14.22 billion, missing the Zacks Consensus Estimate of $14.06 billion and increasing 5.87% year over year.
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