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AZUL Gears Up to Report Q4 Earnings: Here's What to Expect

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Azul, S.A. (AZUL - Free Report) is scheduled to report fourth-quarter 2022 results on Mar 6, before market open.

Azul has failed to surprise its shareholders, with its earnings missing the Zacks Consensus Estimate in three of the four trailing quarters (beating on one instance). The negative earnings surprise for the four quarters was 8.7%, on average.

The Zacks Consensus Estimate for fourth-quarter earnings is currently pegged at a loss of 26 cents, which suggests a 55.2% increase from the year-ago reported figure. The earnings consensus of the company has been revised downward by more than 100% in the past 60 days.

AZUL Price, Consensus and EPS Surprise

AZUL Price, Consensus and EPS Surprise

AZUL price-consensus-eps-surprise-chart | AZUL Quote

Let’s look at the factors that are expected to influence the fourth-quarter earnings of AZUL.

Improved air travel demand can be expected to have boosted the top line of Azul. The Zacks Consensus Estimate for the company’s top line is currently pegged at $899 million, which is an increase of 34.5% from the year-ago reported figure.

The company’s revenues are expected to have been buoyed by upbeat passenger revenues with increasing air travel demand mainly on the domestic front. An uptick is also expected in the available seat kilometers, which measures the airline’s passenger carrying capacity. With the favorable movement of air traffic and capacity, the company is expected to witness a better load factor, which is the indicator of the airline’s capacity utilization.

The bottom line is expected to have suffered due to escalating operating expenses. The surging fuel prices are likely to have played the key role in such an increase.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for AZUL this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks before they're reported with our Earnings ESP Filter.

Azul has an Earnings ESP of 0.00% and a Zacks Rank of 3.

Highlights of Q3

Azul incurred a loss (excluding $1.52 from non-recurring items) of 72 cents per share (loss of R$1.25) in the third quarter of 2022, wider than the Zacks Consensus Estimate of a loss of 68 cents. Loss per share, however, narrowed year over year. Total revenues of $835.6 million (R$4,376.8 million) missed the Zacks Consensus Estimate of $849 million but increased 60.7% year over year as air travel demand improved.

Here are some stocks from the Zacks Airline industry that have provided better-than-expected fourth-quarter 2022 earnings.

Alaska Air Group, Inc. (ALK - Free Report) is being aided by the improved air travel demand situation. In the fourth quarter of 2022, ALK reported better-than-expected results. The company expects a 23-29% increase in the top line during the first quarter of 2023. ALK has been increasing its capacity to meet the upbeat demand. Capacity is expected to increase 11-14% in the first quarter of 2023.

Alaska Air, currently holding a Zacks Rank of 2, has evidenced the Zacks Consensus Estimate of the company’s earnings being revised upward by 29.4% in the past 60 days.

United Airlines (UAL - Free Report) , currently carrying a Zacks Rank of 2, is seeing a steady recovery in domestic and leisure air-travel demand. UAL was profitable in the fourth quarter of 2022 due to upbeat air travel demand. The fourth quarter was the third consecutive profitable quarter at UAL. Driven by solid demand, management expects total revenue per available seat mile to grow almost 25% year over year for the first quarter of 2023. Total revenues are anticipated to grow almost 50% year over year.

The Zacks Consensus Estimate for first-quarter 2023 has been revised upward by 270% in the past 60 days to 68 cents.

American Airlines (AAL - Free Report) is being aided by the improved air travel demand situation. In the fourth quarter of 2022, AAL reported better-than-expected results. The company reported earnings of $1.17 per share, outperforming the Zacks Consensus Estimate by 2.63%. For first-quarter 2023, AAL’s earnings are expected to register 100.4% growth on a year-over-year basis. For 2023, the company’s earnings are expected to grow 332% on a year-over-year basis.

The Zacks Consensus Estimate for AAL’s current-year earnings per share has been revised upward by 31.1% in the past 60 days. The company currently holds a Zacks Rank of 2.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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