GOL Linhas Aereas Inteligentes S.A.
) reported third-quarter 2013 net loss per share of R$0.71 or
approximately 31 cents, much wider than the Zacks Consensus
Estimate of loss per share of 17 cents. The results, however,
improved from the year-ago loss of R$1.16 (or approximately 57
cents). The quarter's results were hurt by a rise in aircraft
rent and traffic service fees, higher maintenance materials and
repair charges and increased promotional expenses.
The company reported third-quarter net loss of R$197.0 million
(approximately $86.1 million), better than the year-ago net loss
of R$309.4 million (approximately $135.3 million).
Net revenue increased 12.2% year over year to R$2,230.5 million
(approximately $975.2 million) in the reported quarter. The top
line, however, was below the Zacks Consensus Estimate of $1,016.0
Revenue passenger kilometers or RPK - implying revenue generated
per kilometer per passenger - for the quarter declined 9.7% from
the year-ago quarter to 8,658.8 million. International RPK
improvement of 18.1% was somewhat negated by 12.1% lower revenues
from domestic grounds.
Available Seat kilometers (ASK) - that measures an airline's
passenger carrying capacity - fell 4.2% year over year to
12,446.6 million, with domestic decline of 7.0%. On the
international front, ASK moved up 25.8%.
During the quarter, the company's total load factor was at 69.6%,
down 420 basis points from the year-ago quarter. Load factor in
the domestic arena moved down 410 basis points (bps) and
internationally, it fell 420 bps.
Operating costs and expenses was flat year over year at R$2,193.5
million (approximately $959.0 million) in the reported quarter.
Third-quarter operating income was R$37.0 million (approximately
$16.2 million) compared with an operating loss of R$200.7 million
(approximately $99.0 million) in the year-ago quarter.
Exiting the third quarter, GOL Linhas' cash and cash equivalents
increased to R$1,629.3 million (approximately $772.1 million)
from R$1,050.6 million (approximately $550.0 million) in the
corresponding year-ago quarter. Long-term debt increased to
R$5,054.7 million (approximately $2,395.4 million) from
R$4,644.5million (approximately $2,432.4 million) in the
GOL intends to expand its international operations by 5-8% next
year while keeping domestic network unchanged. We believe
that GOL's long-term business strategy of route expansion along
with strategic acquisitions and agreements are likely to create
significant operational synergies.
During the quarter, GOL and leading U.S. passenger carrier,
Delta Airline Inc.
) accomplished key milestones in their long-term exclusive
alliance. The carriers have attained their immediate goal of
expanding the code share agreement, offering greater benefits to
their loyal customer base and a seamless experience at
However, various risk factors such as competitive threats,
subdued global economy, increased aircraft maintenance costs and
weak demand remain nagging concerns on the stock.
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DELTA AIR LINES (DAL): Free Stock Analysis
GOL LINHAS-ADR (GOL): Free Stock Analysis
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GOL - which operates with other industry players such as
Copa Holdings S.A.
) - has a Zacks Rank #2 (Buy).
Another company operating within this segment worth taking note
US Airways Group, Inc.
) with a Zacks Rank #1 (Strong Buy).