Nyse Order Imbalance 110380.0 Shares On Buy Side

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.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

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.

Zacks Investment Research

A month has gone by since the last earnings report for Norfolk Southern (NSC). Shares have added about 0.8% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Norfolk Southern due for a pullback? 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.

Earnings Beat at Norfolk Southern in Q3

NSC's 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, owing to lower costs.

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

Overall volumes increased 7%. Total revenue per unit dipped 4% year over year. Income from railway operations more than doubled to to $1.6 billion.

Railway operating expenses declined 34% on a year-over-year basis to $1.45 billion, primarily due to a double-digit decrease in expenses on fuel.

Norfolk Southern’s operating ratio (operating expenses as a percentage of revenues) on an adjusted basis improved to 63.4% in the third quarter from 69.1% in the year-ago quarter, mainly owing to lower costs. A lower value of the metric is desirable.

Segmental Performance of NSC

Merchandise revenues improved 3% year over year to $1.86 billion. Actual segmental revenues were lower than our estimate of $1.9 billion. Volumes, as well as revenue per unit increased 2% year over year.

Revenues from Intermodal improved 4% year over year to $763 million. Actual segmental revenues were lower than our projection of $765.1 million. While segmental volumes increased 9%, revenue per unit tumbled 5%.

Coal revenues came in at $427 million, down 2% year over year. Actual segmental revenues surpassed our projection of $423.1 million. Coal volumes improved 11% year over year. Revenue per unit declined 11% in the reported quarter.

Liquidity & Buyback

Norfolk Southern exited the third quarter with cash and cash equivalents of $975 million compared with $1.56 billion at the end of 2023. NSC had a long-term debt of $16.6 billion at the third-quarter end compared with $17.2 billion at the end of 2023.

The company did not repurchase any shares under its stock repurchase program in the third quarter of 2024.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Norfolk Southern has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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, Norfolk Southern has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Zacks Investment Research