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Why Is Copa Holdings (CPA) Down 7.7% Since Last Earnings Report?

It has been about a month since the last earnings report for Copa Holdings (CPA). Shares have lost about 7.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Copa Holdings due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Copa Holdings Q3 Earnings Miss Estimates, Down Y/Y

The company's earnings per share of $1.36 missed the Zacks Consensus Estimate of $1.42. Moreover, the bottom line plunged significantly year over year. Results were hurt by high fuel prices and weakening Brazilian and Argentinian currencies.

Quarterly revenues increased more than 2% year over year to $672.4 million but lagged the Zacks Consensus Estimate of $684.2 million. Passenger revenues inched up 1.4% year over year to $649.11 million.

Operational Statistics

While passenger unit revenue per available seat mile (PRASM) slipped 4.8%, yield per passenger mile dipped 3.3%. Passenger traffic (on a consolidated basis) rose 4.8% and capacity was up 6.6% in third-quarter 2018. Load factor contracted 140 basis points to 84.3% as traffic rise was outweighed by capacity growth.

Additionally, unit revenue per available seat mile (RASM) slid 4.2%. Operating cost per available seat mile (CASM) rose 4.3% in the reported quarter, primarily due to higher fuel costs. However, the metric excluding fuel declined 5.5%. Cost-cutting efforts among other factors led to this upside. Average fuel price per gallon surged 31.6% year over year to $2.40.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -37.59% due to these changes.

VGM Scores

At this time, Copa Holdings has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Copa Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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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.

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