Copa Holdings Q4 Earnings Beat Estimates, Decrease Year Over Year

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].