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Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
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Passenger Revenues Likely to Aid Air Canada's (ACDVF) Q3 Earnings
Air Canada (ACDVF - Free Report) is scheduled to report third-quarter 2023 results on Oct 30.
Air Canada, currently sporting a Zacks Rank #1 (Strong Buy), has a mixed record with respect to earnings surprise. The company has outpaced the Zacks Consensus Estimate for earnings in two of the past four quarters. Again, ACDVF has reported lower-than-expected earnings per share in the other two quarters. The average miss is 160.16%.
Given this backdrop, let’s delve deeper to unearth the factors likely to have influenced the carrier’s performance in the to-be-reported quarter.
We expect upbeat passenger revenues to have aided the carrier’s performance in the to-be-reported quarter. With people again taking to the skies in the post-COVID world, air-travel demand is buoyant.
Driven by the concept of ‘revenge travel’, a term emanating from the prolonged periods of lockdown, people remain eager to undertake a flight despite headwinds like flight disruptions caused by labor shortages. Revenge travel highlights a strong desire to travel in response to the monotony and exhaustion of life caused by the COVID-19-induced lockdown.
However, high fuel costs, driven by the northward movement in oil price, are likely to have hurt ACDVF’s bottom-line performance in the to-be-reported quarter.
High Fuel Cost: Bane for the Entire Industry
A rise in this key input cost is likely to weigh on results of all airline players. ACDVF apart, this is likely to dent third-quarter results of fellow airline companies like Southwest Airlines (LUV - Free Report) and JetBlue Airways (JBLU - Free Report) .
Southwest Airlines now expects fuel cost per gallon in the $2.7-$2.8 band (the earlier guidance was in the $2.55-$2.65 range). JetBlue anticipates fuel price per gallon to be around $2.95 in third-quarter 2023 (prior view: $2.75-$2.90 band). While Southwest Airlines will release results on Oct 26, JBLU will do the same on Oct 31.
LUV is currently carrying a Zacks Rank #5 (Strong Sell). JBLU is presently carrying a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
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