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Will High Fuel Costs Mar Copa Holdings' (CPA) Q1 Earnings?

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Copa Holdings (CPA - Free Report) is scheduled to report first-quarter 2022 earnings numbers on May 11, after market close.

The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 162.4%.

Let’s see how things are shaping up for Copa Holdings this earnings season.

Copa Holdings, S.A. Price and EPS Surprise

Copa Holdings, S.A. Price and EPS Surprise

Copa Holdings, S.A. price-eps-surprise | Copa Holdings, S.A. Quote

Factors to Note

Improved air-travel demand in Latin America is expected to have boosted passenger revenues (which account for the majority of CPA’s top line) in the to-be-reported quarter. The Zacks Consensus Estimate for passenger revenues in the first quarter indicate more than 200% jump from the year-ago reported number.

Copa Holdings is expanding capacity, measured in available seat miles (ASMs), in response to the improved demand. The consensus mark for ASMs in the first quarter suggests more than 100% jump from the year-ago reported number.

However, escalating fuel prices amid the Russia-Ukraine war are likely to have hurt Copa Holdings’ bottom line in the first quarter. The Zacks Consensus Estimate for average fuel price per gallon hints at a 59.4% rise from the first-quarter 2021 reported number.

What Does the Zacks Model Say?

Our proven model does not conclusively predict an earnings beat for Copa Holdings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is not the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Copa Holdings has an Earnings ESP of -27.78% as the Most Accurate Estimate is pegged at 26 cents, lower than the Zacks Consensus Estimate of 36 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Copa Holdings carries a Zacks Rank #3..

Highlights of Q4 Earnings

Copa Holdings delivered fourth-quarter 2021 earnings (excluding 71 cents from non-recurring items) of $1.98 per share, which beat the Zacks Consensus Estimate of $1.15. Quarterly revenues of 575 million also outperformed the Zacks Consensus Estimate of $546.2 million and rose significantly year over year, thanks to an improvement in air travel.

Earnings Snapshots

Within the broader Transportation sector, Trinity Industries (TRN - Free Report) and Kirby Corporation (KEX - Free Report) recently reported first-quarter 2022 earnings numbers.

Trinity, carrying a Zacks Rank #4 (Sell), reported first-quarter 2022 adjusted earnings of 3 cents per share, which missed the Zacks Consensus Estimate of 16 cents. Results were hurt by supply chain disruptions and labor shortages.

Trinity’s operating revenues of $473 million also fell short of the Zacks Consensus Estimate of $603 million. However, the top line increased year over year due to higher external deliveries in the Rail Products Group.

Kirby, carrying a Zacks Rank #3, reported first-quarter 2022 earnings of 29 cents per share, in line with the Zacks Consensus Estimate. In the year-ago period, the company had incurred a loss of 6 cents per share.

Kirby’s total revenues of $611 million outperformed the Zacks Consensus Estimate of $583 million and also improved approximately 23% year over year. The upside was driven by higher revenues at the marine transportation, and distribution and services segments.

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