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The Zacks Analyst Blog Highlights: Azul, Copa, JetBlue, Allegiant and Southwest

Zacks Equity Research

For Immediate Release

Chicago, IL –May 15, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Azul AZUL, Copa Holdings CPA, JetBlue Airways JBLU, Allegiant Travel Company ALGT and Southwest Airlines LUV.

Here are highlights from Tuesday’s Analyst Blog:

Airline Stock Roundup: Earnings Edition

In the past week, Latin American carriers — Azul    and Copa Holdings— outperformed with respect to the bottom line in first-quarter 2019. However, quarterly earnings declined year over year for both companies.  While Azul’s results were hurt by the 16.3% depreciation of the Brazilian real, weak pricing hurt Copa’s performance.

On the non-earnings front, the likes of JetBlue Airways and Allegiant Travel Company unveiled their respective traffic reports for April. Load factor (% of seats filled by passengers) declined at both carriers as capacity expansion outweighed traffic growth.

Additionally, the Bureau of Transportation Services (BTS) revealed that average airfares in the United States increased (on an unadjusted basis) in April.

 (Read the last Airline Stock Roundup here).

Recap of the Past Week’s Most Important Stories

1. Azul’s first-quarter 2019 earnings of 49 cents beat the Zacks Consensus Estimate of 43 cents. However, the bottom line declined 14% year over year. Operating revenues totaled $686.8 million, which missed the Zacks Consensus Estimate of $694.1 but improved year over year. This upside can be primarily attributed to high passenger revenues. Notably, passenger revenues, accounting for bulk (95.8%) of the top line, rose 15.3% on a year-over-year basis backed by solid demand for air travel among other factors. (Read more: Azul Q1 Earnings Beat, Fall Y/Y on Currency Headwind)

Azul carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2. Copa Holdings’ first-quarter 2019 earnings of $2.11 per share outpaced the Zacks Consensus Estimate of $1.64. However, the bottom line declined 34.5% year over year. Downturn in some Latin-American economies and lower revenues negatively impacted the company’s results. Meanwhile, quarterly revenues declined nearly 6% year over year to $672.2 million and also marginally missed the Zacks Consensus Estimate of $672.3 million. This downturn was due to a 6.6% decrease in passenger revenues. While passenger unit revenue per available seat mile (PRASM) fell 8.4%, yield per passenger mile was down 8.8%. (Read more: Copa Holdings Q1 Earnings Top, Down Y/Y on Weak Revenues)

3. At JetBlue, traffic (measured in Revenue Passenger Miles or RPMs) increased 6.6% year over year to 4.59 billion. Consolidated capacity (or available seat miles/ASMs) expanded 7.4% to 5.39 billion on a year-over-year basis. Load factor contracted 60 basis points (bps) to 85.1%. This Long Island City, NY-based low-cost carrier registered a completion factor (system wide) of 98.6% in April, with 73.4% flights on schedule. (Read more: JetBlue's Traffic Rises But Load Factor Declines in April)

4. At Allegiant, RPMs increased 11.1% on a year-over-year basis to 1.17 billion. Meanwhile, ASMs expanded 16.1% to 1.47 billion in the month. However, load factor contracted 360 basis points year over year to 79.6%. In April 2019, Allegiant transported 10.2% more passengers compared with the year-ago period number. (Read more: Allegiant's April Traffic Rises, Load Factor Falls)

5. According to data released by the BTS, average airfares (unadjusted) increased 3.5% in April. On a seasonally-adjusted basis, airfares declined 0.1% in the same month. Recently, carriers like Southwest Airlines have increased ticket prices. Moreover, travel website Hopper has reportedly predicted that individual ticket prices for domestic round-trip (on an average) will rise to $240 by June from $229 in April.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Southwest Airlines Co. (LUV) : Free Stock Analysis Report
JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report
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Copa Holdings, S.A. (CPA) : Free Stock Analysis Report
AZUL SA (AZUL) : Free Stock Analysis Report
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