Grupo Aeroportuario del Sureste (ADR) Earnings Fly Past Estimates

Grupo Aeroportuario del Sureste (ADR) , or ASUR, announced third-quarter results just before the opening bell this morning. The Mexican airport operator reported earnings of $1.44 per share, which was three pennies above analysts' estimates and up 13.8% from last year's results based on constant currency rates. Higher traffic at its airports along with slightly higher revenue per passenger led to the better than expected results. Let's fly in a little closer and take a look at the numbers that drove results this quarter.

Higher traffic drives results

Total passenger traffic was up 8.94% over the third quarter of last year. Leading the strong traffic gains was the company's crown jewel Cancun airport. The airport enjoyed a 9.94% surge in international passenger traffic along with a 5.41% boost in domestic passenger traffic, which is crucial as 75% of the company's passenger traffic passes through this one airport.

The overall increase in passenger traffic along with a slight 0.27% increase in commercial revenue per passenger helped push total revenue up 12.22% over last year along with boosting operating profit by 9.42%. The 12.22% jump in revenue, however, is a bit misleading as a 48.69% jump in construction services revenue inflated revenue a bit. That revenue is later offset by higher capital expenses.

The more important numbers are the aeronautical services and nonaeronautical services revenue, which were up 8.57% and 9.16%, respectively, as a result of higher traffic. Leading the way here was commercial revenue, which was up 9.19%, with food and beverage revenue popping 33.61% and parking lot fees increasing by 25.08%. If there was one area of weakness it was the company's duty-free revenue, which fell by 3.09% year over year. Overall, the increase in revenue from higher traffic drove gains to the bottom line, leading to the 9.42% boost in operating profit and stronger overall earnings.

Investment pays off

The other big contribution to ASUR's higher than expected profitability came from its investment in Aerostar, which is a 50% joint venture that owns the Luis Munoz Marin International Airport in Puerto Rico. ASUR's equity in the earnings of Aerostar resulted in a net gain of Ps.21.31 million, which is up from the net gain of Ps.0.33 million in the third quarter of last year. On top of that the company reported a Ps.51.24 million gain in stockholders' equity, which is up from Ps.16.52 last year. While traffic at the airport was up 3.7%, the gain wasn't really driven by the traffic increase as it was largely due to the depreciation of the peso against the U.S. dollar.

Overall, ASUR reported a strong quarter. Not only was passenger traffic up, but the company's revenue per passenger increased as well as it was able to leverage its traffic gains. This is exactly what investors want to see from the company.

You can't afford to miss this

"Made in China" -- an all too familiar phrase. But not for much longer: There's a radical new technology out there, one that's already being employed by the U.S. Air Force, BMW and even Nike. Respected publications like The Economist have compared this disruptive invention to the steam engine and the printing press; Business Insider calls it "the next trillion dollar industry." Watch The Motley Fool's shocking video presentation to learn about the next great wave of technological innovation, one that will bring an end to "Made In China" for good. Click here !

The article Grupo Aeroportuario del Sureste (ADR) Earnings Fly Past Estimates originally appeared on

Matt DiLallo has no position in any stocks mentioned. The Motley Fool recommends Grupo Aeroportuario del Sureste (ADR). Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More