Copa Holdings' Q3 Earnings Surpass Estimates, Revenue Miss

Core Insights - Copa Holdings, S.A. (CPA) reported Q3 2025 earnings per share of $4.20, exceeding the Zacks Consensus Estimate of $4.03 and reflecting a 20% year-over-year improvement. Revenues reached $913.1 million, slightly below the Zacks Consensus Estimate of $915 million, but up 6.8% year over year [1][9]. Revenue Breakdown - Passenger revenues, which accounted for 94.3% of total revenues, increased by 5.2% year over year to $861.33 million, driven by an 8% rise in revenue passenger miles (RPMs), although partially offset by a 2.6% decline in yield [2]. - Cargo and mail revenues rose 21.4% year over year to $29.68 million due to higher cargo volumes. Other operating revenues surged 86.3% year over year to $22.13 million, attributed to increased ConnectMiles revenues from a co-branded credit card agreement renewal [2]. Operational Metrics - Copa Holdings' traffic, measured in revenue passenger miles, grew by 8%, while capacity, measured in available seat miles, increased by 5.8% compared to the same quarter last year. The load factor improved by 1.8 percentage points to 88% [3]. - Passenger revenue per available seat mile decreased by 0.5% year over year to 10.5 cents, while revenue per available seat mile (RASM) increased by 1% to 11.1 cents. Cost per available seat mile fell by 2.7% year over year [4]. Expense Analysis - Total operating expenses rose by 2.9% year over year to $700.84 million, influenced by capacity growth but mitigated by lower fuel and maintenance costs. Employee-related expenses increased by 5.4%, and sales and distribution costs grew by 6.6% [5][4]. Financial Position - As of the end of Q3 2025, Copa Holdings had cash and cash equivalents of $248.82 million, up from $236.17 million at the end of the previous quarter. The company took delivery of five Boeing 737 MAX 8 aircraft and added a second Boeing 737-800 freighter under an operating lease [6]. Future Outlook - Management anticipates consolidated capacity growth of 8% year over year, with an operating margin expected to be between 22-23%. The fuel cost is projected at $2.47 per gallon, and RASM is expected to be 11.2 cents [7]. - For 2026, capacity is expected to grow by 11-13% year over year, with non-fuel unit costs anticipated to be between 5.7 to 5.8 cents. The company expects to end 2025 with 124 aircraft and 132 aircraft by the end of 2026 [8].