Why Is Copa Holdings (CPA) Up 6.1% Since Last Earnings Report?

Core Viewpoint - Copa Holdings reported strong third-quarter earnings, surpassing expectations, but revenue slightly missed estimates, raising questions about future performance [3][4][11]. Financial Performance - Earnings per share for Q3 2025 were $4.20, exceeding the Zacks Consensus Estimate of $4.03, marking a 20% year-over-year improvement [3]. - Total revenues reached $913.1 million, a 6.8% increase year-over-year, but fell short of the expected $915 million [3]. - Passenger revenues, contributing 94.3% to total revenues, grew 5.2% year-over-year to $861.33 million, driven by an 8% increase in revenue passenger miles (RPMs) [4]. - Cargo and mail revenues increased by 21.4% year-over-year to $29.68 million, attributed to higher cargo volumes [4]. Operational Metrics - Copa Holdings' traffic, measured in RPMs, grew by 8%, while capacity, measured in available seat miles, increased by 5.8%, resulting in a load factor of 88%, up 1.8 percentage points [5]. - Revenue per available seat mile (RASM) grew by 1% year-over-year to 11.1 cents, while passenger revenue per available seat mile dipped by 0.5% to 10.5 cents [6]. - Total operating expenses rose by 2.9% year-over-year to $700.84 million, influenced by capacity growth but offset by lower fuel and maintenance costs [6]. Future Outlook - Management expects consolidated capacity to grow by 8% year-over-year, with an operating margin projected between 22-23% [9]. - For 2026, capacity is anticipated to grow by 11-13% year-over-year, with unit costs excluding fuel expected to be between 5.7 to 5.8 cents [10]. - Copa Holdings plans to end 2025 with 124 aircraft and 2026 with 132 aircraft [10]. Market Position - Copa Holdings has a Zacks Rank of 3 (Hold), indicating an expectation of in-line returns in the coming months [13]. - The stock has an aggregate VGM Score of A, reflecting strong performance in value and momentum metrics [12].