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Gol Linhas' (GOL) Q3 Loss In Line, Revenues Increase Y/Y

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  • GOL
  • JBLU
  • SAVE
  • RYAAY

Gol Linhas Aereas Inteligentes GOL incurred a loss (excluding $1.59 from non-recurring items) of 85 cents per share in the third quarter of 2021, in line with the Zacks Consensus Estimate. The amount of loss narrowed year over year.

Net operating revenues of $366.4 million surpassed the Zacks Consensus Estimate of $334.2 million. The top line surged significantly year over year, with passenger revenues (accounting for 92.3% of total revenues) rising more than 100%, thanks to continued recovery in air-travel demand in Brazil as vaccination rates increase. Cargo and other revenues improved 53.9% owing to higher volumes transported, besides other factors. Gol Linhas transported 4.9 million passengers in the third quarter, up 91.7% from the year-ago period. However, the same was down 48.5% from the third quarter of 2019, reflecting the softness in travel demand compared with the pre-coronavirus level.

Operational Statistics

Consolidated revenue passenger kilometers (RPK), the measure for revenues generated per kilometer per passenger, jumped 87.5% from the third quarter of 2020 (down 46.6% from the third quarter of 2019). The carrier did not operate international flights in the quarter.

Gol Linhas Aereas Inteligentes S.A. Price, Consensus and EPS Surprise

Gol Linhas Aereas Inteligentes S.A. Price, Consensus and EPS Surprise
Gol Linhas Aereas Inteligentes S.A. Price, Consensus and EPS Surprise

Gol Linhas Aereas Inteligentes S.A. price-consensus-eps-surprise-chart | Gol Linhas Aereas Inteligentes S.A. Quote


Consolidated available seat kilometers (ASK), measuring an airline's passenger-carrying capacity, also climbed 82.4% year over year (down 45.7% from the third quarter of 2019) with increase in domestic capacity.

Gol Linhas’ total load factor (percentage of seats filled with passengers) was 81.5% in the quarter, an improvement of 2.2 percentage points year over year due to traffic increasing more than the amount of capacity expansion. Net yield rose 7.3% year over year.

Net passenger revenues per ASK ascended 10.3%, while net revenues per ASK climbed 7.7%. Average fuel price per liter increased 47.9%. However, cost per ASK dropped 15.9% year over year. Excluding fuel, the metric decreased 22.8%. Meanwhile, total operating expenses (adjusted) skyrocketed 93.9% year over year, primarily due to significant increase in salaries, wages and benefits, as well as costs associated with rise in passenger numbers.

Gol Linhas, carrying a Zacks Rank #4 (Sell), exited the third quarter with total liquidity (cash and cash equivalents, cash investments, restricted cash, accounts receivable, and securities and receivables) of R$2.08 billion, up 15.6% sequentially.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

During the third quarter, operating activities generated cash of R$369 million compared with R$35.5 million cash consumed in the year-ago period. Long-term debt totaled R$16.91 billion at the end of the reported quarter, up 30.8% year over year.

Gol Linhas’ fleet, at the end of the reported quarter, comprised of 129 Boeing 737 aircraft (114 NGs and 15 operational MAXs). The average age of the fleet was 11.1 years.

Outlook

With travel demand continuing to improve in Brazil on the back of high vaccination rates, Gol Linhas expects demand to increase 26% in the fourth quarter of 2021 from the year-ago level, and 33% sequentially. In response to this expected rise in demand, the company plans to increase capacity by 29% in the current quarter from the comparable period in 2020. The carrier expects its load factor to be 82% in the fourth quarter.

Operating cost per available seat kilometers, excluding fuel, is estimated to reduce approximately 12% in the current quarter from the year-ago level. Net operating revenues are estimated to be around R$2.6 billion while EBITDA is anticipated to be about R$0.8 billion in the fourth quarter. Gol Linhas expects to end the fourth quarter with total liquidity of R$3.8 billion.

Performance of Other Airline Stocks

Ryanair Holdings RYAAY, carrying a Zacks Rank #4 (Sell), reported second-quarter fiscal 2022 (ended Sep 30, 2021) earnings of $1.16 per share, which fell short of the Zacks Consensus Estimate of $1.80. In the year-ago period, the company incurred adjusted loss of 12 cents per share due to coronavirus-led weakness in air-travel demand.

Ryanair’s quarterly revenues of $2,104 million also fell shy of the Zacks Consensus Estimate of $2,338.8 million. The top line increased significantly year over year with improvement in traffic, thanks to the rollout of the EU Digital Covid Certificates, which facilitate travel within the European Union during the pandemic. Easing of coronavirus-led travel restrictions also drove traffic.

JetBlue Airways JBLU, carrying a Zacks Rank #4, incurred a third-quarter 2021 loss (excluding 52 cents from non-recurring items) of 12 cents per share, comparing favorably with the Zacks Consensus Estimate of a loss of 19 cents. The amount of loss also narrowed from the year-ago loss of $1.75.

JetBlue’s operating revenues of $1,972 million skyrocketed 300.8% year over year and also surpassed the Zacks Consensus Estimate of $1,927.9 million. This massive year-over-year jump reflects improving air-travel demand as more and more people take to the skies following widespread vaccination.

Spirit Airlines SAVE, carrying a Zacks Rank #4, reported third-quarter 2021 loss (excluding 83 cents from non-recurring items) of 69 cents per share, narrower than the Zacks Consensus Estimate of a loss of 95 cents and the year-ago loss of $2.32.

Spirit Airlines’ operating revenues of $922.6 million increased in excess of 100% year over year. This massive year-over-year jump reflects improving air-travel demand as COVID-19 cases fall and the threat of the Delta variant recedes in the United States. However, revenues were lower than the Zacks Consensus Estimate of $935.4 million.


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