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What's in the Offing for Copa Holdings (CPA) in Q1 Earnings?

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·4 min read
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  • CPA
  • GLOG-PA
  • EGLE

Copa Holdings CPA is scheduled to report first-quarter 2021 earnings on May 5, after market close.

The Zacks Consensus Estimate for first-quarter loss has narrowed to $2.21, from $2.31, 60 days ago. Let’s take a look at the factors that are expected to have influenced the company’s performance in the March quarter.

Improvement in air-travel demand in Latin America is expected to reflect in Copa Holdings’ passenger revenues. The Zacks Consensus Estimate for first-quarter passenger revenues indicates a 23.6% rise from the fourth-quarter 2020’s reported number. However, since travel demand continues to lag the pre-pandemic levels, the consensus mark for passenger revenues shows a 68.2% decline from the first-quarter 2020’s reported figure.

With this anticipated decline in passenger revenues, the company’s top line is likely to have been significantly affected when compared on a year-over-year basis. The company anticipates total revenues for the first quarter to be in the range of $170-$200 million. The Zacks Consensus Estimate for the same is pegged at $187.93 million, indicating a drop of 68.4% from the year-ago period’s reported number. However, the same suggests an 18.5% improvement from the fourth-quarter 2020 reported figure.

In response to the tepid demand, the airline reduced its capacity significantly. The Zacks Consensus Estimate for capacity, measured in available seat miles/ASMs, hints at a 53.3% plunge from the year-ago quarter’s reported level. The company estimates its first-quarter 2021 capacity to be around 40% of the 2019 levels.

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

What Does the Zacks Model Say?

Our proven model does not conclusively 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 +9.58% as the Most Accurate Estimate is pegged at a loss of $2, while the Zacks Consensus Estimate is poised at a loss of $2.21. 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 (Sell).

Highlights of Q4 Earnings

Copa Holdings incurred a loss (excluding $1.97 from non-recurring items) of $2 per share in fourth-quarter 2020, wider than the Zacks Consensus Estimate of a loss of $1.90. Quarterly revenues of $158.6 million beat the Zacks Consensus Estimate of $153.4 million. However, the top line plunged 76.7% year over year with passenger revenues (contributed 93% to the top line) declining 77.6%. Results were hurt by coronavirus-induced headwinds on the aviation industry.

Stocks to Consider

Investors interested in the broader Transportation sector may consider Eagle Bulk Shipping EGLE, Euronav NV EURN and GasLog LP GLOG as these stocks possess the right combination of elements to beat on earnings this reporting cycle.

Eagle Bulk has an Earnings ESP of +64.52% and a Zacks Rank of 3.

Euronav has an Earnings ESP of +7.14% and a Zacks Rank #3.

GasLog has an Earnings ESP of +20.69% and a Zacks Rank #2.

Each of the companies will release first-quarter 2021 results on May 6.

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Copa Holdings, S.A. (CPA) : Free Stock Analysis Report

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GasLog LP. (GLOG) : Free Stock Analysis Report

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