Copa Holdings, S.A. (CPA) on Q1 2021 Results - Earnings Call Transcript
Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Copa Holdings' First Quarter Earnings Call. As a reminder, this call is being webcast and recorded on May 6, 2021. Now I will turn the conference over to Raul Pascual, Director of Investor Relations. Sir, you may begin. Raul Pascual: Thank you, Tamika, and welcome, everyone, to our first quarter earnings call. Joining us today are Pedro Heilbron, CEO of Copa Holdings and Jose Montero, our CFO. First, Pedro will start by going over our first quarter highlights and the actions the company has taken to mitigate the impact from the COVID-19 pandemic, followed by Jose, who will discuss our first quarter financial results in detail. Immediately after, we'll open the call for questions from analysts. Pedro Heilbron: Thank you, Raul. Good morning to all, and thanks for participating in our first quarter earnings call. Before we begin, I'd like to thank all our coworkers for their commitment to the company and recognize their continuous efforts and dedication to keep Copa at the forefront of Latin American aviation. To them, as always, my utmost respect and admiration. In our last earnings call in February, we advised of deteriorating demand patterns and expressed concerns over what appeared to be new infection waves across many countries in our region. Since then, we faced two diverging themes in our network. On the one hand, in the US, Panama and a few other countries, we're seeing a downward trend in infection rates, which has led to fewer travel restrictions and an uptick in demand. On the other hand, several countries in Latin America continue to struggle with the virus, leading many to re-impose their travel restrictions and/or new health requirements, affecting demand for international travel and, in many cases, leading to a reduction in our planned capacity. However, we're hopeful that, as countries in our region continue taking the necessary actions to control this health crisis, we should start seeing a more robust recovery, fewer restrictions and improving traffic patterns. Now, I'll highlight some of our first quarter results. In terms of capacity, we reached 39% of first quarter 2019 ASM. Load factor improved from 63% in January to 75% in March, leading to an average load factor of 69% for the quarter. Our revenues increased by 17% over the previous quarter to $185 million as a result of additional capacity. This additional capacity also allowed us to bring down our ex-fuel CASM from $0.134 in Q4 to $0.085. Jose Montero: Thank you, Pedro. Good morning, everyone. I hope that you and your families are safe and doing well. Thanks for being with us today. I'd like to join Pedro in acknowledging our great corporate team for all their efforts and great spirit during these very challenging times. I'll start by going over our first quarter results. Our capacity came in at 2.5 billion available seat miles, which amounts to about 39% of the capacity operated during the first quarter of 2019. Load factor came in at an average of 69% for the quarter. We reported a net loss of $110.7 million or $2.60 per share. Excluding special items, we would have reported a net loss of $95.1 million or $2.23 per share. Special items for the quarter are comprised mainly of an unrealized mark-to-market loss of $15.7 million related to the company's convertible notes issued in 2020. In terms of operating results, we reported a $77.1 million loss for the quarter, an improvement over the operating results for the fourth quarter of 2020. And our cash consumption for the quarter came in better than expected at an average of $23 million per month, driven mostly by improving sales for travel during the second quarter. A significant part of our focus as a company is in our costs. Our unit costs, excluding fuel, for the first quarter came in at $0.085 per ASM. We continued operating more efficiently in terms of passenger servicing as well as in terms of our administrative and other overhead expenses. And we are poised to achieve a sub $0.06 CASM ex-fuel once we reach our pre-COVID-19 capacity. I'm going to spend some time now discussing our balance sheet and liquidity. As of the end of the first quarter, we had assets of close to $4.1 billion and our cash, short and long-term investments ended at $1.2 billion. We also ended the quarter with an aggregate amount of $345 million in unutilized committed credit facilities, which added to our cash, brought our total liquidity to more than $1.5 billion. As to our debt, we ended the quarter with $1.7 billion in debt and lease liabilities. The increase in our debt balance compared to the end of 2020 is related to the financing of seven 737 MAX 9 aircraft received between December 2020 and March 2021. As for our fleet plan, during the first quarter, we received six 737 MAX 9 aircraft. We also finalized the sale and delivery of four Embraer-190s. And as of today, we have delivered 10 out of the 14 aircraft we agreed to sell to a third-party and expect to have delivered the entire E-190 fleet by June of 2021. Operator: Your first question is from the line of Hunter Keay of Wolfe Research. Hunter Keay: Hey, good morning everyone. Thank you. Pedro Heilbron: Good morning. Hunter Keay: I appreciate that you're not going to want to give full year guidance at this point, but the second quarter revenue guide was quite strong, I thought, relative to what I was expecting, and particularly relative to the first quarter. So can you help me frame out how you're thinking about that trajectory into the back half of the year, if these current trends continue? And if it's not a revenue commentary, maybe just help me think about sort of capacity as you're exiting 2021. Thank you. Pedro Heilbron: So let me start, Hunter, and then I'll let Jose add some comment. So I think, as we have mentioned in the past, it's really very, very difficult to predict the future under the present conditions that we're dealing with, including travel restrictions by many countries and shifting demand patterns. And that's why we're only talking about Q2 and not the rest of the year. Jose Montero: Yes. I think that, Hunter, demand is increasing as of today but we have seen this before, and there's still a level of uncertainty in terms of the behavior of the virus in the region. So things are still volatile, as Pedro mentioned. But as of today, for the second half, we could see a sort of the same trend that we're seeing sort of the first quarter into the second half as well. But that's, again, we have to just really be mindful that it is the picture that we have today. Operator: Your next question is from the line of Stephen Trent with Citi. Stephen Trent: Yes, good morning everybody and thanks for taking my question. Just one or two quick ones for me. I was intrigued, Pedro, you mentioned the kind of inability of many to do point-to-point, especially in that region. But what sort of competitive trends or opportunities are you seeing for Wingo? And then the second question, if you could just refresh my memory. You guys were running - have been running four daily flight banks and you're going to six by the end of June, if I heard that correctly? Pedro Heilbron: Yes, that is correct. I'll start with the second question. So we've operated a six-bank hub since... Jose Montero: 2011. Pedro Heilbron: Yes. Since 2011, we've been operating on six banks. We've obviously reduced all of that since the pandemic started but we're going back in June. By the end of June, we'll be back at six banks or at least that's our intention, which will give us a lot more flexibility in putting together a better network for scheduling flights in a more efficient and effective way. So it's not that, that's going to drive our growth, but it will drive a better schedule and better rotation of aircraft for the remaining of the year. And then in terms of Wingo, so Wingo started pre-pandemic with four 737-800s and is now operating six 737-800s. So we've actually increased capacity by about 50% since the pandemic started and have opened a few new domestic and international markets. So they're still affected by the pandemic. Colombia, of course, is still affected, even though domestic markets have recuperated a little bit better than international market but Wingo did see an opportunity to strengthen their network and they've done so. Stephen Trent: Okay, let me leave it there. Thanks very much guys. Pedro Heilbron: Thank you, Stephen. Operator: Your next question is from the line of Pablo Monsivais with Barclays. Pablo Monsivais: Hi, thanks for taking my question. First, I believe it is kind of a little early to tell, but can you please provide some color on the path to recover your profitability levels after COVID? How should we expect yields to perform in light of lower corporate demand? And perhaps with weaker FX and higher oil prices, how are you going to pivot from low margins to the margin that you have pre-COVID? Thank you. Jose Montero: Yes, Pablo, this is Jose here. So I would say that we have to take a basis on where do we think - what's the path to sort of bring our revenues - our unit revenues from the place where they are today into a lower dilution and how we will match our capacity to sort of that revenue environment. So I think that, if we assume that, in the medium term, our unit revenue dilution is sort of in the mid-teens, we could reach an operating P&L breakeven at 60% of our pre-COVID capacity. And I think that, taking that a further step, if we were to assume unit revenues being at their pre-COVID levels, we could reach our pre-COVID level of operating margins in the teens at a much lower capacity than we had than the pre-COVID-19 levels. So we could be at maybe 60% to 70% of our pre-COVID capacity. Assuming a zero-revenue dilution, we will be achieving our pre-COVID sort of mid-teen operating margin levels. So that's, I mean, just to give you some of the framework where we are at. And of course, that's a function of all the efficiencies that we're working in, in terms of our costs going forward. Pedro Heilbron: And Pablo, I'll add to that. You asked for some color. So, a lot of the work we've put in since the pandemic started to make the company more cost-efficient is with the new reality that you referred to in our mind. So there's going to be less business traffic for a while, yields are going to be affected, but if we can deliver lower costs, which is our intention, then we'll be able to have the same success as before or even more, at a yield - at a revenue dilution or a yield dilution over pre-pandemic. Operator: Your next question is from the line of Duane Pfennigwerth with Evercore. Unidentified Analyst: Good morning this is actually Ray on for Duane. As you look across the - as you look across your portfolio markets in light of travel restrictions and re-openings, which are getting better and easier to predict and which are harder to plan as compared to the 1Q commentary that you laid out earlier in your press release? Pedro Heilbron: You mean in terms of markets? Jose Montero: In terms of restrictions and markets. Pedro Heilbron: Yes, it's really hard to predict. Unidentified Analyst: Yes, if you could have laid out across countries and just kind of update to understand, yes. Pedro Heilbron: Yes. So right now, for example, there are very strict restrictions in places such as Argentina, Chile, Venezuela, Cuba, even some in Panama for South American travelers, not flight restrictions, right. But then these other countries I've mentioned, in most of them, flights are actually restricted. So it's anyone's guess when those restrictions will be lifted. They will be lifted, of course. They will control the virus. Things will get better. We know that, but it's very difficult to know that's going to happen in July, in September, or who knows. And in many cases, those are new restrictions that were not in place at the end of last year. So - and there could be other countries enforcing new restrictions as things change. But I would say that, directionally, I think, even though there's like something like a third wave in many countries of the virus, I think, directionally, we're going in the right direction in terms of vaccination rates and travel demand and getting things under control. Unidentified Analyst: And if I can just sneak one follow-up here. I appreciate you giving us the deliveries for the balance of the year but could you also maybe give us some of the corresponding CapEx around that and also the CapEx and deliveries for '22? And as related, what do you think the balance between these and owned would be? Jose Montero: Yes, Ray, the CapEx for 2021, including the airplanes that we were already taking delivery of, so talking about full year total CapEx, it's going to be around $450 million. And that's - most of the aircraft, there's a portion of it that is cash CapEx that is associated with maintenance events and IP investments, etc. That's around 50 out of that 450. And then for next year, you could assume that it's going to be between 350 to 400 total CapEx again, both including aircraft and another type of CapEx. So that's basically where we're at. You had another follow-up on that. What was the second question that you asked, Ray? All right, we'll get in touch with you to answer the other question that you had. All right, I guess we're going to the next question. Operator: Your next question is from the line of Mike Linenberg with Deutsche Bank. Mike Linenberg: Hey Jose, Pedro - Joe, my one question is just a modeling question here. Obviously, the tax is basically zero. And I'm just curious whether or not have you taken a valuation allowance against your deferred tax asset to the extent that now you're not going to be booking any tax credits? Is that what's going on forward or was this just - there's some sort of anomaly or timing difference in this quarter, and next quarter, we should just assume it moves back to 10%? Thanks. Jose Montero: Yes. Yes, it's a timing - the specific line that we put into the fourth quarter was a loss carry-forward that got booked. That usually gets done at the moment where we have a clear visibility about the performance of the entire year, so it's done toward the end of the year. So it's just simply timing, so the difference that we saw in the tax line in this quarter was purely timing. And it would depend on if there's further sort of tax credits or tax loss carry-forwards that we declare depending on the performance of the entire year. And they will usually be put in, in the fourth quarter, so that's kind of how that works here. Operator: Your next question is from the line of Savi Syth with Raymond James. Savi Syth: Hey, good morning. I'm just kind of curious relative to your kind of what you're seeing from a selling standpoint today. How much of your kind of current ATL is in terms of vouchers? And kind of what percent of that, what you're selling today, is in the kind of the form of vouchers? And somewhat related to that is, kind of curious if you're seeing any change in business demand recovery. Jose Montero: Yes. In terms of ATL, the vast majority of the growth that we saw - I think we had a growth in the quarter of about $5 million in the ATL, and it's purely - I would say, most of it is cash coming in. So we have the majority of it is cash. There is a portion, but it's a minor portion that's associated with vouchers and the like for future travel. The majority of it is actual cash coming in, yes. Pedro Heilbron: And we're not seeing a significant recovery in business demand. Of course, there is more business demand than some months ago, but nothing significant yet. It's mostly VFR and leisure. Savi Syth: And Jose, is the ATL mix, how much of the ATL is vouchers today? Jose Montero: I think it's less than 10% probably at most, yes; 10% to 15%. Operator: Your next question is from the line of Alejandro Zamacona with Credit Suisse. Alejandro Zamacona: Hi, Pedro. Hi, Jose, Raul. Thank you for the call. Just a question in terms of the traffic recovery and the city pairs or routes. So which markets continue closed at this point and what's the expectation to open them? And perhaps, is the expected recovery maybe more driven by the reopening of routes or by increasing capacity of the existing routes? Thank you. Pedro Heilbron: Yes. So I mean most markets are open, but some, as I mentioned before, are very restricted in terms of how many frequencies we can operate to markets such as Venezuela, Argentina, Chile and others I had mentioned before. They have restrictions that don't allow us to operate more than a few frequencies per week, whereas before we would have had multiple frequencies per day, and that's impacting demand. And there are also other travel restrictions around the region. In the markets that are open, like the US and the Caribbean, for example, we're seeing a stronger demand than in the restricted markets, as it would be expected. Alejandro Zamacona: Thank you. Operator: Your next question comes from the line of Joseph DeNardi with Stifel. Joseph DeNardi: Thanks. Good morning. Pedro, you mentioned in your prepared remarks that you think fewer markets will be able to support point-to-point post-COVID. Can you just elaborate on that? Kind of why do you think that? Pedro Heilbron: Yeah, our hub has always distinguished itself by connecting a large number of small city pairs. Over 70% of the city pairs we connect have less than 20 passengers per day each way. Post-pandemic, we expect city pairs that have enough traffic, that don't fall maybe within that 70% but even some that do, that pre-pandemic had enough traffic for nonstop service. And I am not saying in every city pair, I'm just saying some additional city pairs will need a hub and Panama is the best-placed hub to serve those markets. So we think there will be additional opportunities to strengthen the Hub of the Americas. And it could be, again, city pairs that can only be served through Panama, whereas before, they had nonstop flights or city pairs that will be able to sustain much less nonstop capacity than pre-pandemic. And of course, that will change over time but coming out of this crisis, I think the Hub of the Americas in Panama is going to be in an even stronger position to serve all those markets. Joseph DeNardi: Okay. That's helpful. And then, Jose, maybe just following up on Pablo's question, can you remind us how you're thinking about kind of cost structure post-COVID? I think you had previously said you could get back to pre-COVID CASM ex, with 80% of pre-COVID capacity. Is that still how you're thinking about it? And then just a clarification on ending the year with 83 aircraft, does that include stored or parked aircraft? Thank you. Jose Montero: Yes. So the first question, Joe, is we think that we'll get sub-6 CASM by the time that we are back to pre-COVID capacity and I think we'll be back to our pre-COVID CASM by the time that we're around 80%. Yes, that's still very much our target, and we're relatively confident about that target. And we've been making a lot of efforts in terms of contract renegotiations and savings and overhead and the fleet moves that we've made, so that's still very much in our radar. And then in terms of the - Pedro Heilbron: Yes, the 83 aircraft at the end of the year. Jose Montero: 83 are total aircraft, including the stored aircraft, yes, Joe. Joseph DeNardi: Thank you. Jose Montero: And we said - yes, by the way, Joe, I mentioned in our script that we have, right now, 16 airplanes that are under long-term storage and they're included, of course, in the 81 that we have right now. By the end of the year, we'll end up with 83 aircraft, and we'll - we expect right now to have seven under long-term storage by then, including those 83. So we will activate a subset of those 16 aircraft that we have right now. Operator: Our last question comes from the line of Helane D. Becker with Cowen. Helane D. Becker: Thanks very much operator. Hi, everybody and thank you very much for your time. As you think about adding cities back to the network, how will you think about adding them back? Will it be a focus of VFR or leisure traffic, cities first? Or how should we think about the shift in mix away from business travel into more leisure and VFR for now? Pedro Heilbron: So yes, an interesting question, because the cities we've added are, of course, our stronger cities or stronger destination. And those, in many cases, include a significant business travel component pre-pandemic but we're adding a lot fewer frequencies than before. So strong business markets like Panama, Bogota, for example, we're serving a few times per day and pre-pandemic would have been seven or eight times. So even though those are strong business markets, frequencies are way down because of that. But we have opened all those markets because they just, as mentioned before, happened to be stronger routes overall. The ones that we're going to be opening gradually from here to the end of the year and into 2022 usually have, actually, a high leisure and VFR component, but are just much smaller markets than the others. So that's driving the decision more than the mix itself. Helane D. Becker: Okay. That's very helpful. Thank you. And then the other question I had was, as you're thinking about getting back to profitability, how should we think about the return of capital plans because for a long time until the pandemic, your dividend was an important component of that and obviously, with the pandemic, that's just not the case right now. So how should we think about return of capital in '20 - let's say, a year, a year and half from now, when maybe things are back to some level of the next normal? Pedro Heilbron: Yes. So we haven't changed our dividend policy. We're just missing the profit part of it and even though I want to talk officially, because we have to see how things develop, but I would expect that once we have the profit component, the dividend policy will kick in. We have strong liquidity. We're in a strong overall position. So that's what I would expect going forward. Helane D. Becker: Okay, that's very helpful. Thanks Pedro. Thanks Jose. Jose Montero: Thank you, Helane. Pedro Heilbron: Thank you. Operator: There are no further questions. Pedro Heilbron: Okay. Okay, thank you all. This then concludes our earnings call. Thank you for being with us. Thank you for your continued support. You know where to find us. Please have a great day. Thank you. Operator: Ladies and gentlemen, thank you for your participation. That concludes the presentation. You may disconnect and have a wonderful day.
Copa Holdings (NYSE:CPA) Sees Positive Outlook from Analysts
Copa Holdings (NYSE:CPA) is a prominent airline company based in Panama, operating under the Copa Airlines brand. It provides passenger and cargo services across the Americas, with a strong presence in Latin America. The company competes with other regional airlines like Avianca and LATAM Airlines. On May 14, 2025, Cowen & Co. maintained its "Buy" rating for CPA, with the stock priced at $103.14.
TD Cowen raised its price target for CPA from $140 to $144, as highlighted by TheFly. This suggests confidence in the stock's potential for growth. Zacks Investment Research also identifies CPA as a top value stock for long-term investment, based on its Zacks Style Scores. These scores help investors find strong stocks across different strategies, including value, growth, and momentum.
Currently, CPA is priced at $102.60, showing a slight increase of 0.68% or $0.70. The stock has fluctuated between $102 and $103.37 during the trading day. Over the past year, CPA has seen a high of $114 and a low of $80.01, indicating some volatility. The company's market capitalization is approximately $4.22 billion, reflecting its significant presence in the airline industry.
Today's trading volume for CPA on the NYSE is 100,238 shares, which provides insight into investor interest and activity. The stock's performance and the recent price target increase by TD Cowen suggest that investors may see potential in CPA's future growth and stability.
Copa Holdings (NYSE:CPA) Maintains Strong Position Despite Revenue Decline
- Morgan Stanley reaffirms its "Overweight" rating on Copa Holdings (NYSE:CPA), signaling confidence in the airline's future performance.
- The stock price of Copa Holdings shows resilience with a modest increase, despite a 1.5% decline in revenues.
- Copa Holdings demonstrates significant market volatility and investor interest, with a trading volume of 851,412 shares on the NYSE.
Copa Holdings (NYSE:CPA) is a leading airline company in Latin America, known for its extensive network and efficient operations. The company operates primarily in the passenger and cargo airline industry, offering flights to various destinations across the Americas. Copa Holdings faces competition from other regional airlines, but it remains a significant player due to its strategic routes and competitive pricing.
On November 22, 2024, Morgan Stanley maintained its "Overweight" rating for Copa Holdings, indicating a positive outlook on the stock. At the time, CPA was priced at $93.37, and the recommendation was to hold the stock. This decision comes despite a 1.5% decline in revenues, primarily due to a decrease in passenger revenues, as highlighted by the company's third-quarter earnings report.
Despite the revenue decline, Copa Holdings managed to surpass earnings estimates, showcasing its ability to maintain profitability in challenging conditions. The stock's current price of $93.37 reflects a modest increase of 0.66% or $0.61. During the trading day, CPA experienced fluctuations, with a low of $88.71 and a high of $95.10, indicating investor interest and market volatility.
Over the past year, CPA has seen a high of $114 and a low of $80.01, demonstrating significant price movement. The company's market capitalization is approximately $3.88 billion, reflecting its substantial presence in the airline industry. With a trading volume of 851,412 shares on the NYSE, Copa Holdings remains an actively traded stock, attracting attention from investors and analysts alike.
Copa Holdings (NYSE:CPA) Maintains Strong Position Despite Revenue Decline
- Morgan Stanley reaffirms its "Overweight" rating on Copa Holdings (NYSE:CPA), signaling confidence in the airline's future performance.
- The stock price of Copa Holdings shows resilience with a modest increase, despite a 1.5% decline in revenues.
- Copa Holdings demonstrates significant market volatility and investor interest, with a trading volume of 851,412 shares on the NYSE.
Copa Holdings (NYSE:CPA) is a leading airline company in Latin America, known for its extensive network and efficient operations. The company operates primarily in the passenger and cargo airline industry, offering flights to various destinations across the Americas. Copa Holdings faces competition from other regional airlines, but it remains a significant player due to its strategic routes and competitive pricing.
On November 22, 2024, Morgan Stanley maintained its "Overweight" rating for Copa Holdings, indicating a positive outlook on the stock. At the time, CPA was priced at $93.37, and the recommendation was to hold the stock. This decision comes despite a 1.5% decline in revenues, primarily due to a decrease in passenger revenues, as highlighted by the company's third-quarter earnings report.
Despite the revenue decline, Copa Holdings managed to surpass earnings estimates, showcasing its ability to maintain profitability in challenging conditions. The stock's current price of $93.37 reflects a modest increase of 0.66% or $0.61. During the trading day, CPA experienced fluctuations, with a low of $88.71 and a high of $95.10, indicating investor interest and market volatility.
Over the past year, CPA has seen a high of $114 and a low of $80.01, demonstrating significant price movement. The company's market capitalization is approximately $3.88 billion, reflecting its substantial presence in the airline industry. With a trading volume of 851,412 shares on the NYSE, Copa Holdings remains an actively traded stock, attracting attention from investors and analysts alike.
Copa Holdings, S.A. (NYSE:CPA) Quarterly Earnings Preview
- Copa Holdings, S.A. (NYSE:CPA) is anticipated to report an EPS of $3.48 and revenue of $859.46 million for the upcoming quarter.
- The stock has appreciated by 15.1% in the last three months, buoyed by increased air-travel demand and fleet modernization.
- Despite an expected 20.7% decline in EPS for the third quarter, CPA's financial metrics such as a P/E ratio of 6.58 and a debt-to-equity ratio of 0.66 demonstrate strong financial health.
Copa Holdings, S.A. (NYSE:CPA) is a prominent airline company in Latin America, known for its extensive network and modern fleet. The company is set to release its quarterly earnings on November 20, 2024. Analysts predict an earnings per share (EPS) of $3.48 and revenue of approximately $859.46 million. Despite these projections, CPA has shown strong stock performance, appreciating by 15.1% in the last three months.
The positive stock trend is driven by increased air-travel demand and fleet modernization efforts. CPA's Zacks Rank #2 (Buy) suggests it is a promising investment. The Zacks Consensus Estimate for fourth-quarter 2024 earnings has been revised upwards by 1.5% over the past 60 days, indicating growing optimism. However, the third-quarter earnings are expected to show a 20.7% decline in EPS compared to last year.
Despite the anticipated decline, CPA's financial metrics remain strong. The company has a price-to-earnings (P/E) ratio of 6.58, indicating a low valuation relative to earnings. Its price-to-sales ratio is 1.26, meaning investors pay $1.26 for every dollar of sales. The enterprise value to sales ratio is 1.72, reflecting the company's total valuation relative to sales.
CPA's financial efficiency is evident in its enterprise value to operating cash flow ratio of 5.50, showing effective conversion of cash flow into enterprise value. The earnings yield is 15.19%, indicating the percentage of each dollar invested in equity earned by the company. With a debt-to-equity ratio of 0.66, CPA maintains a moderate level of debt relative to equity.
The current ratio of 0.98 suggests CPA has nearly enough current assets to cover its current liabilities. This financial stability, combined with the company's strategic initiatives, positions CPA as a strong player in the airline industry, despite the expected short-term earnings decline.
Copa Holdings, S.A. (NYSE:CPA) Quarterly Earnings Preview
- Copa Holdings, S.A. (NYSE:CPA) is anticipated to report an EPS of $3.48 and revenue of $859.46 million for the upcoming quarter.
- The stock has appreciated by 15.1% in the last three months, buoyed by increased air-travel demand and fleet modernization.
- Despite an expected 20.7% decline in EPS for the third quarter, CPA's financial metrics such as a P/E ratio of 6.58 and a debt-to-equity ratio of 0.66 demonstrate strong financial health.
Copa Holdings, S.A. (NYSE:CPA) is a prominent airline company in Latin America, known for its extensive network and modern fleet. The company is set to release its quarterly earnings on November 20, 2024. Analysts predict an earnings per share (EPS) of $3.48 and revenue of approximately $859.46 million. Despite these projections, CPA has shown strong stock performance, appreciating by 15.1% in the last three months.
The positive stock trend is driven by increased air-travel demand and fleet modernization efforts. CPA's Zacks Rank #2 (Buy) suggests it is a promising investment. The Zacks Consensus Estimate for fourth-quarter 2024 earnings has been revised upwards by 1.5% over the past 60 days, indicating growing optimism. However, the third-quarter earnings are expected to show a 20.7% decline in EPS compared to last year.
Despite the anticipated decline, CPA's financial metrics remain strong. The company has a price-to-earnings (P/E) ratio of 6.58, indicating a low valuation relative to earnings. Its price-to-sales ratio is 1.26, meaning investors pay $1.26 for every dollar of sales. The enterprise value to sales ratio is 1.72, reflecting the company's total valuation relative to sales.
CPA's financial efficiency is evident in its enterprise value to operating cash flow ratio of 5.50, showing effective conversion of cash flow into enterprise value. The earnings yield is 15.19%, indicating the percentage of each dollar invested in equity earned by the company. With a debt-to-equity ratio of 0.66, CPA maintains a moderate level of debt relative to equity.
The current ratio of 0.98 suggests CPA has nearly enough current assets to cover its current liabilities. This financial stability, combined with the company's strategic initiatives, positions CPA as a strong player in the airline industry, despite the expected short-term earnings decline.
