Copa Holdings, S.A.’s CPA third-quarter 2024 earnings per share of $3.50 surpassed the Zacks Consensus Estimate of $3.48 but declined 20.3% year over year. Revenues of $854.7 million lagged the Zacks Consensus Estimate of $860 million and fell by 1.5% year over year due to upbeat passenger revenues.

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

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

Passenger revenues (which contributed 95.8% to the top line) decreased 1.8% from the third quarter of 2023. The downside was mainly led by the last-minute suspension of flights between Panama and Venezuela at the end of July, weaker currencies in Latin America and increased industry capacity in the region. As a result, passenger yield declined 8.7% year over year.

Cargo and mail revenues grew 4.3% to $24.45 million due to higher volumes, partly offset by lower cargo yields. Other operating revenues were $11.88 million, up 8.3% year over year due to higher ConnectMiles revenues from non-air partners.

The operating margin declined 3.3 percentage points from the year-ago quarter.

CPA’s Other Financial Details

On a consolidated basis, Copa Holdings’ traffic (measured in revenue passenger miles) grew 7.6% year over year, and capacity (measured in available seat miles) increased 9.5% from the year-ago quarter. With traffic growth outpacing capacity expansion, the load factor (percentage of seats filled by passengers) decreased 1.6 percentage points to 86.2% in the reported quarter.

Passenger revenue per available seat miles dropped 10.3% year over year to 10.5 cents. Revenue per available seat mile (RASM) declined 10.1% to 11 cents. Cost per available seat mile dipped 6.2%. Excluding fuel, the metric fell 1.6%. The average fuel price per gallon fell by 13.3% to $2.60.

Total operating expenses increased 2.8% year over year to $681 million due to higher capacity, offset by lower sales, and distribution and fuel costs. Expenses on wages, salaries, benefits and other employee expenses rose 8.7% year over year, whereas maintenance, materials and repairs increased 18.1% year over year. Sales and distribution costs decreased 8% year over year, and fuel costs fell by 5.3% in the same period. Passenger servicing costs grew 13.3% from the year-ago quarter. Other operating and administrative expenses increased 15.2% from the third quarter of 2023.

Copa Holdings exited the third quarter with cash and cash equivalents of $275.25 million compared with $200.64 million at the prior-quarter end. Total debt, including lease liabilities, was $1.9 billion compared with $1.8 billion at the second-quarter end.

CPA ended the third quarter with a consolidated fleet of 110 aircraft, which comprises 67 Boeing 737-800s, 32 Boeing 737 MAX 9s, nine Boeing 737-700s, one Boeing 737 MAX 8 and one Boeing 737-800 freighter.

CPA’s 2024 & 2025 Outlook

CPA’s management now expects consolidated capacity to grow 9% year over year, and the operating margin is expected to come in the range of 21-22%. RASM is now expected to be 11.4 cents (prior view: 11.5 cents).

The load factor is now expected to be 86% (prior view: 86.5%).

Non-fuel unit costs are anticipated to be 5.8 cents. The fuel cost is expected to be $2.67 per gallon, down from the prior guidance of $2.70.

For 2025, the company anticipates increasing its capacity by approximately 7% to 9% compared to 2024, with unit costs, excluding fuel (Ex-Fuel CASM), projected to be around 5.8 cents.

CPA’s Zacks Rank

Copa Holdings currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Q3 Performances of Other Transportation Companies

Delta Air Lines DAL reported third-quarter 2024 earnings (excluding 47 cents from non-recurring items) of $1.50 per share, which fell short of the Zacks Consensus Estimate of $1.56. Earnings decreased 26.11% on a year-over-year basis due to high labor costs.

Revenues of $15.68 billion surpassed the Zacks Consensus Estimate of $15.37 billion and increased 1.2% on a year-over-year basis, driven by strong air travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.59 billion, flat year over year.

Norfolk Southern Corporation’s NSC third-quarter 2024 earnings (excluding $1.6 from non-recurring items) of $3.25 per share beat the Zacks Consensus Estimate of $3.10 and increased 22.6% year over year due to lower costs.

Railway operating revenues were $3.05 billion in the quarter under review, lagging the Zacks Consensus Estimate of $3.09 billion. However, the top line increased 2.7% year over year, with the Merchandise and Intermodal segments registering an improvement in revenues.

J.B. Hunt Transport Services’ JBHT third-quarter 2024 earnings of $1.49 per share outpaced the Zacks Consensus Estimate of $1.42 but declined 17.2% year over year.

Total operating revenues of $3.07 billion surpassed the Zacks Consensus Estimate of $3.04 billion but fell 3% year over year. The operating income for the September quarter decreased 7% year over year to $224.1 million.

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