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Copa Holdings (CPA) to Report Q4 Earnings: What's in Store?

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  • CPA
  • WAB
  • AL-PA

Copa Holdings CPA is scheduled to report fourth-quarter 2020 earnings on Feb 10, 2021, after market close.

The company has an impressive surprise record with its earnings having surpassed the Zacks Consensus Estimate in three of the last four quarters, the average beat being 9.9%. It reported lower-than-expected earnings per share in the remaining quarter.

Copa Holdings, S.A. Price and EPS Surprise

Copa Holdings, S.A. Price and EPS Surprise
Copa Holdings, S.A. Price and EPS Surprise

Copa Holdings, S.A. price-eps-surprise | Copa Holdings, S.A. Quote

Moreover, the Zacks Consensus Estimate for the fourth-quarter loss has widened to $1.90 from a loss of $1.81, 30 days ago.

Against this backdrop, let’s take a look at the factors that might have shaped the company’s December-quarter performance.

Even though air-travel demand in Latin America improved of late, it is way below the year-ago levels. The recent uptick can be gauged from the Zacks Consensus Estimate for fourth-quarter passenger revenues being pegged at $133 million, suggesting a rise from the third-quarter 2020’s reported figure of $27.62 million. However, the Zacks Consensus Estimate for fourth-quarter passenger revenues indicates a 79.8% decline from the figure reported in fourth-quarter 2019.

Again, the Zacks Consensus Estimate for fourth-quarter 2020 load factor (% of seats filled by passengers), currently standing at 75, implies an improvement of 15 percentage points sequentially owing to higher traffic. However, the consensus mark for fourth-quarter 2020 load factor is less than the 85% reported in fourth-quarter 2019.

We expect the year-over-year weakness in passenger revenues to have been mitigated by low fuel costs per gallon. Backed by low fuel price, the Zacks Consensus Estimate for expenses on aircraft fuel hints at an 82.6% decline from the figure reported in fourth-quarter 2019.

What Does the Zacks Model Say?

Our proven Zacks model does not predict an earnings beat for Copa Holdings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Copa Holdings has an Earnings ESP of +14.39%. The Most Accurate Estimate is currently pegged at a loss of $1.63 while the Zacks Consensus Estimate stands at a loss of $1.90. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Copa Holdings carries a Zacks Rank #4, currently.

Highlights of Q3 Earnings

Copa Holdings incurred a loss (excluding 8 cents from non-recurring items) of $2.86 per share in third-quarter 2020, wider than the Zacks Consensus Estimate of a loss of $2.79. In the year-ago quarter, the company reported earnings of $2.45 per share. Quarterly revenues of $32.4 million missed the Zacks Consensus Estimate of $39 million. Moreover, the top line plunged 95.4% year over year with passenger revenues (accounted for 85.2% of the top line) declining 96%.

Stocks to Consider

Investors interested in the Zacks Transportation sector may check out the following stocks, which possess the right combination of elements to beat estimates in the upcoming releases.

Air Lease Corporation AL has an Earnings ESP of +6.11% and a Zacks Rank #3, currently. The company will release fourth-quarter 2020 results on Feb 22.

Forward Air Corporation FWRD has an Earnings ESP of +1.37% and a Zacks Rank of 3, currently. The company will release fourth-quarter 2020 results on Feb 11.

Westinghouse Air Brake Technologies Corporation WAB has an Earnings ESP of +5.99% and is Zacks #3 Ranked, currently. The company will release fourth-quarter 2020 results on Feb 18.

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