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Gol Linhas (GOL) Provides Bullish Traffic Outlook for Q1

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With air-travel demand picking up in Latin America, Gol Linhas GOL expects total demand or air traffic (measured in revenue passenger kilometers) to be up 46% year over year in the first quarter of 2022. Detailed results will be out on Apr 28.

To meet increasing demand, Gol Linhas is boosting capacity. GOL expects total capacity (measured in available seat kilometers) for the March quarter to be up 44% for the March quarter. Seats are likely to increase 49%.

Owing to the uptick in total demand, GOL expects first-quarter passenger unit revenues to increase roughly 45% year over year. EBITDA margin is likely to increase approximately 11%.  Average fuel price per liter is expected to be R$4.62 in the March quarter of 2022, much higher than R$4.17 recorded in fourth-quarter 2021. Fuel unit costs (CASK fuel) are anticipated to increase roughly 48% year over year, mainly induced by the escalated average jet fuel price.

However, non-fuel unit costs (CASK Ex-Fuel) are expected to decline roughly 4% on a year-over-year basis owing to enhanced productivity and the appreciation of the Brazilian Real versus the U.S. Dollar.

Despite the uptick in demand, Gol Linhas expects to incur a loss in first-quarter 2022. Loss per share in Brazilian currency is expected to be R$1.98 while loss per American Depositary Share is anticipated to be 78 cents, indicating deterioration from the fourth-quarter 2021 loss of 62 cents. The Zacks Consensus Estimate for the March quarter currently hints at a loss of 24 cents.

Zacks Rank & Key Picks

Gol Linhas currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the Zacks Transportation sector include Old Dominion Freight Line ODFL and Forward Air Corporation FWRD, both stocks currently carrying a Zacks Rank of 2.

Old Dominion Freight Line is being aided by improved freight market conditions. Efforts to reward its shareholders also augur well. In February, ODFL’s board cleared a 50% increase in its quarterly dividend payout, taking the total to 30 cents per share.

ODFL’s earnings trumped the Zacks Consensus Estimate in each of the trailing four quarters, the average being 6.46%. The Zacks Consensus Estimate for ODFL’s 2022 earnings has moved 1.87% north in the past 60 days.

Higher volumes owing to better freight market environment bolster Forward Air’s top line. Thanks to growth in its operations, FWRD is committed to rewarding its shareholders with dividends and share buybacks. In February, FWRD’s board approved a 14% hike in its quarterly dividend payment to 24 cents per share.

The Zacks Consensus Estimate for Forward Air’s 2022 earnings has been revised 2.41% upward in the past 60 days. FWRD’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 11.11%.


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Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report
 
Old Dominion Freight Line, Inc. (ODFL) : Free Stock Analysis Report
 
Forward Air Corporation (FWRD) : Free Stock Analysis Report
 
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