Copa Holdings, S.A. (CPA) - CPA reported improved revenue passenger miles in February 2025, reflecting strong air-travel demand with a year-over-year increase [1] - Available seat miles increased by 1.7% year over year, while revenue passenger miles rose by 2.3% year over year, indicating that traffic growth outpaced capacity expansion [2] - The load factor increased to 86.7% from 86.3% in February 2024, demonstrating efficient capacity utilization [2] Zacks Rank & Price Performance - CPA currently holds a Zacks Rank of 3 (Hold), with shares gaining 7.3% over the past three months, outperforming the Zacks Airline industry growth of 5.2% [3] Other Airline Companies - LATAM Airlines reported a 4.4% year-over-year increase in consolidated capacity and a 3.1% increase in revenue passenger-kilometers for February 2025 [7] - LATAM's load factor decreased to 83.3% from 84.4% in February 2024, despite transporting over 6.5 million passengers, a 1.8% increase year over year [8] - Ryanair transported 12.6 million passengers in February 2025, reflecting a 14% year-over-year increase, with a stable load factor of 92% [9] - Ryanair operated over 71,360 flights in February 2025, showing improvement from the previous month affected by delayed Boeing deliveries [10]

Summary of Copa Holdings and Industry Performance Core Viewpoint - Copa Holdings has experienced a 3% decline in share price over the past month, which is better than the S&P 500 performance, raising questions about future trends leading up to the next earnings report [1]. Company Performance - The consensus estimate for Copa Holdings has decreased by 8.42% over the past month, indicating a downward trend in earnings expectations [2]. - Copa Holdings currently holds a Zacks Rank of 3 (Hold), suggesting an expectation of in-line returns in the upcoming months [4]. VGM Scores - Copa Holdings has an average Growth Score of C, a Momentum Score of B, and a Value Score of A, placing it in the top 20% for the value investment strategy. The overall aggregate VGM Score is A, which is significant for investors not focused on a single strategy [3]. Industry Comparison - Copa Holdings is part of the Zacks Transportation - Airline industry. In comparison, Southwest Airlines (LUV) has seen a 3.6% increase in share price over the past month [5]. - Southwest Airlines reported revenues of $6.93 billion for the last quarter, reflecting a year-over-year increase of 1.6%, with EPS rising from $0.37 to $0.56 [5]. - Southwest is projected to incur a loss of $0.18 per share for the current quarter, which represents a year-over-year change of +50%, with a Zacks Consensus Estimate adjustment of -15% over the last 30 days [6].

Core Insights - Copa Holdings, S.A. reported preliminary passenger traffic statistics for February 2025, showing an increase in both capacity and passenger traffic compared to February 2024 [1][2]. Group 1: Operating Data - Available Seat Miles (ASM) for February 2025 were 2,389.9 million, a 1.7% increase from 2,348.8 million in February 2024 [1][2]. - Revenue Passenger Miles (RPM) for February 2025 were 2,072.0 million, reflecting a 2.3% increase from 2,025.8 million in February 2024 [1][2]. - The load factor for February 2025 was 86.7%, which is 0.4 percentage points higher than the 86.3% recorded in February 2024 [1][2]. Group 2: Company Overview - Copa Holdings is a prominent provider of passenger and cargo services in Latin America, operating in North, Central, and South America, as well as the Caribbean [3].

Core Insights - Zacks Premium provides various tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1] - The Zacks Style Scores serve as complementary indicators to the Zacks Rank, helping investors identify stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - Stocks are rated from A to F based on their value, growth, and momentum characteristics, with A being the highest score indicating a better chance of outperforming the market [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] Value Score - The Value Score targets value investors by identifying stocks trading below their true value using various financial ratios such as P/E, PEG, and Price/Sales [3] Growth Score - The Growth Score focuses on a company's future prospects, analyzing projected and historical earnings, sales, and cash flow to find stocks with sustainable growth potential [4] Momentum Score - The Momentum Score helps investors capitalize on price trends, utilizing factors like short-term price changes and earnings estimate revisions to identify optimal entry points [5] VGM Score - The VGM Score combines the three Style Scores to provide a comprehensive rating, helping investors find stocks with attractive value, strong growth forecasts, and positive momentum [6] Zacks Rank Integration - The Zacks Rank, a proprietary stock-rating model, uses earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks historically yielding an average annual return of +25.41% since 1988 [7][8] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for the highest likelihood of success [9] Stock Example: Copa Holdings - Copa Holdings, based in Panama City, operates Copa Airlines and Copa Colombia, and currently holds a 3 (Hold) rating on the Zacks Rank with a VGM Score of A [11] - The company has a Value Style Score of A, supported by a forward P/E ratio of 6.33, making it attractive for value investors [12] - Recent upward revisions in earnings estimates and a Zacks Consensus Estimate of $15.48 per share for fiscal 2025, along with an average earnings surprise of 9.2%, position Copa Holdings favorably for investors [12]

Core Viewpoint - Copa Holdings, S.A. reported fourth-quarter 2024 earnings per share of $3.99, exceeding the Zacks Consensus Estimate of $3.84, but reflecting a 10.7% decline year over year. Revenues of $877.1 million fell short of the Zacks Consensus Estimate of $880.1 million, marking a 4.4% year-over-year decrease primarily due to a 4.8% drop in passenger revenues [1][2]. Financial Performance - Passenger revenues, which accounted for 94.9% of total revenues, decreased by 4.8% compared to the fourth quarter of 2023, driven by a 10.8% decline in passenger yield and a 0.4 percentage-point drop in load factor [2]. - Cargo and mail revenues increased by 9.2% year over year to $29.0 million, while other operating revenues grew by 34.8% year over year to $14.9 million, attributed to higher ConnectMiles revenues from non-air partners [3]. - Total operating expenses decreased by 3.7% year over year to $672.9 million, influenced by a 22.6% reduction in average fuel prices and an 8.3% decrease in sales and distribution costs [6]. Operational Metrics - Copa Holdings' traffic, measured in revenue passenger miles, grew by 6.7% year over year, and capacity, measured in available seat miles, increased by 7.2% from the previous year. However, the load factor decreased by 0.4 percentage points to 86.3% [4]. - Revenue per available seat mile (RASM) declined by 10.4% year over year to 11.3 cents, while passenger revenue per available seat mile fell by 11.2% to 10.8 cents [5]. Cash and Debt Position - At the end of the fourth quarter, Copa Holdings had cash and cash equivalents of $613.31 million, a significant increase from $275.25 million at the end of the previous quarter. Total debt, including lease liabilities, rose to $1.94 billion from $1.87 billion [8]. Future Outlook - Management expects consolidated capacity to grow by 7-8% year over year, with an anticipated operating margin of 20-22%. RASM is projected to be 11.3 cents, and the load factor is expected to reach 86.5%. Non-fuel unit costs are anticipated to be 5.8 cents, with fuel costs expected at $2.60 per gallon [10].

• On February 12, 2025, the Board of Directors of Copa Holdings approved a 2025 quarterly dividend payment of US$1.61 per share, maintaining last year's dividend payment. Dividends will be distributed in March, June, September, and December. The first quarterly dividend will be paid on March 14, 2025, to shareholders on record as of February 28, 2025. • In January, Copa Airlines was recognized by Cirium for the tenth time as the most on-time airline in Latin America in 2024. Copa Airlines' on-time performan ...

Financial Data and Key Metrics Changes - The company reported a net profit for Q4 of $166.2 million or $3.99 per share, and for the full year, the net profit was $608.5 million or $14.56 per share [25] - The operating profit for Q4 was $204.2 million with an operating margin of 23.3%, while the full year operating profit was $753.4 million with a 21.9% operating margin [25][31] - The company ended the year with over $1.4 billion in cash and investments, representing 42% of the last twelve months' revenues, and had $2 billion in debt and lease liabilities [26] Business Line Data and Key Metrics Changes - Capacity increased by 7.2% year over year in Q4, and for the full year, capacity increased by 8.6% [17][19] - Unit revenues (RASM) for Q4 were 11.3 cents, a 10.4% decrease compared to Q4 2023, primarily due to a 10.8% yield reduction [17] - The unit cost excluding fuel (CASM ex-fuel) for Q4 was 5.9 cents, a 2.6% improvement compared to Q4 2023 [18] Market Data and Key Metrics Changes - The company was recognized as the most on-time airline in Latin America for 2024, with an on-time performance of 88.2% [20] - The company anticipates a continuation of the current demand environment in the region for 2025, with expected capacity growth of 7% to 8% year over year [22] Company Strategy and Development Direction - The company aims to maintain cost discipline and continue expanding its network as the most complete and convenient hub for travel in the Americas [22][24] - The focus remains on lowering unit costs and strengthening the network to deliver strong financial results [131] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering strong margins for 2025, projecting an operating margin within a range of 20% to 22% [31] - The management acknowledged challenges such as currency weakness and increased industry capacity impacting yields but expects a potential positive inflection in the second half of the year [45] Other Important Information - The board of directors approved a quarterly dividend payment of $1.61 per share for 2025, maintaining last year's payout [29] - The company repurchased $87 million of its ongoing $200 million share repurchase program during 2024 [30] Q&A Session Summary Question: Fleet details and delivery expectations - Management confirmed that the delivery schedule from Boeing is acceptable, with 13 aircraft expected this year, mostly in the second half [36] Question: CapEx expectations - CapEx for this year is expected to be lower, around $850 million, with cash CapEx around $200 million [39] Question: RASM trends and future prospects - Management indicated that RASM guidance is yearly, with expectations for a slight improvement in the first quarter but overall similar trends continuing [44] Question: Overcapacity in specific regions - Management noted that capacity growth in certain markets, such as Brazil and Colombia, has been around 20%, impacting yields [50] Question: FX volatility management - Management stated that they price in dollars but sell in local currencies, with some hedging in place for Brazilian sales [56] Question: Cargo revenue and profitability - The company operates a single freighter, with most cargo revenue coming from passenger flights, and expects profitability from the additional freighter [86] Question: Business travel demand - Management indicated that corporate accounts show flat business traffic year over year, with no expected growth [59] Question: Jet fuel tariffs and expenses - Management confirmed that they are not at a disadvantage in any market regarding jet fuel costs [120] Question: M&A and alliances - Management expressed satisfaction with the current relationship with United Airlines and sees no immediate need for changes [124]

Core Insights - Copa Holdings reported revenue of $877.05 million for the quarter ended December 2024, a decrease of 4.4% year-over-year, and EPS of $3.99, down from $4.47 in the same quarter last year [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $880.05 million, resulting in a revenue surprise of -0.34%, while the EPS exceeded the consensus estimate of $3.84 by 3.91% [1] Financial Performance Metrics - Load Factor was reported at 86.3%, slightly above the average estimate of 86.1% from five analysts [4] - PRASM (Passenger revenue per ASM) was 10.8 cents, matching the four-analyst average estimate [4] - Yield was reported at 12.5 cents, slightly below the four-analyst average estimate of 12.56 cents [4] - Average Price Per Fuel Gallon was $2.38, lower than the $2.43 average estimate from four analysts [4] - ASMs (Available seat miles) totaled 7.75 billion, below the average estimate of 7.81 billion [4] - CASM Excluding Fuel was reported at 5.9 cents, slightly better than the average estimate of 5.96 cents [4] - CASM was 8.7 cents, also better than the average estimate of 8.82 cents [4] - RPMs (Revenue passenger miles) were 6.68 billion, below the average estimate of 6.71 billion [4] - RASM was reported at 11.3 cents, slightly above the average estimate of 11.28 cents [4] - Fuel Gallons Consumed were 91.2 million, lower than the average estimate of 92.33 million [4] - The total number of aircraft remained at 112, consistent with the average estimate [4] - Operating Revenues from Passenger revenue were $833.19 million, below the average estimate of $844.35 million, representing a year-over-year decline of 5.3% [4] Stock Performance - Shares of Copa Holdings have returned -2.5% over the past month, contrasting with the Zacks S&P 500 composite's increase of +4.3% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Copa Holdings reported quarterly earnings of $3.99 per share, exceeding the Zacks Consensus Estimate of $3.84 per share, but down from $4.47 per share a year ago, indicating a 10.7% year-over-year decline in earnings [1][2] Financial Performance - The company achieved revenues of $877.05 million for the quarter ended December 2024, which was 0.34% below the Zacks Consensus Estimate and a decrease from $916.93 million in the same quarter last year, reflecting a year-over-year revenue decline of 4.5% [2] - Over the last four quarters, Copa Holdings has surpassed consensus EPS estimates four times but has only topped revenue estimates once [2] Stock Performance and Outlook - Since the beginning of the year, Copa Holdings shares have increased by approximately 1.8%, while the S&P 500 has gained 3.2%, indicating underperformance relative to the broader market [3] - The current consensus EPS estimate for the upcoming quarter is $4.08, with expected revenues of $895.58 million, and for the current fiscal year, the EPS estimate is $15.29 on revenues of $3.66 billion [7] Industry Context - The Transportation - Airline industry, to which Copa Holdings belongs, is currently ranked in the top 23% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment and stock performance [5][6]

Core Insights - Copa Holdings reported a net profit of US$166.2 million or US$3.99 per share for 4Q24, and a full-year net profit of US$608.5 million or US$14.56 per share, showing a decrease from the previous year's adjusted net profit of US$671.0 million or US$16.68 per share [5][10][15] - The company experienced a 4.0% increase in revenue passengers carried in 4Q24 compared to 4Q23, with a total of 3,444 thousand passengers [4][5] - Operating revenues for 4Q24 were US$877.1 million, a 3.9% decrease from US$912.8 million in 4Q23, while operating profit was US$204.2 million with an operating margin of 23.3% [6][10][11] Financial Performance - The operating profit for the full year 2024 was US$753.4 million, down from US$807.2 million in 2023, with an operating margin of 21.9% compared to 23.4% in the previous year [5][11] - Revenue per available seat mile (RASM) decreased by 10.4% to 11.3 cents in 4Q24, while operating cost per available seat mile excluding fuel (Ex-fuel CASM) decreased by 2.6% to 5.9 cents [5][6][15] - The company ended 2024 with approximately US$1.4 billion in cash and investments, representing 42% of the last twelve months' revenues [5][12] Capacity and Operations - Capacity, measured in available seat miles (ASMs), increased by 7.2% in 4Q24 compared to 4Q23, with a total of 7,747 million ASMs [4][6] - Copa Airlines was recognized as the most on-time airline in Latin America for 2024, achieving an on-time performance of 88.2% [5][8] Shareholder Returns and Corporate Actions - The company repurchased US$87 million worth of shares in 2024 as part of its US$200 million share repurchase program, representing approximately 2% of total outstanding shares [5][12] - The Board of Directors approved a quarterly dividend payment of US$1.61 per share for 2025, maintaining the previous year's dividend [5][12] Leadership Changes - Peter Donkersloot was appointed as Chief Financial Officer effective March 10, 2025, bringing over 20 years of international experience [5][8]