Copa Holdings Earnings Fall Short of Estimates in Q4, Improve Y/Y

Core Insights - Copa Holdings, S.A. (CPA) reported Q4 2025 earnings per share of $4.18, missing the Zacks Consensus Estimate of $4.44 but showing a 4.7% year-over-year improvement [1][10] - Revenues reached $962.9 million, falling short of the Zacks Consensus Estimate of $967.6 million, but increased by 9.7% year over year, driven by a 12.9% rise in onboard passengers [1][10] Revenue Breakdown - Passenger revenues, which accounted for 94.8% of total revenues, grew by 9.4% year over year to $913.62 million, supported by a 10.1% increase in revenue passenger miles, although partially offset by a 0.6% decrease in passenger yield [2] - Cargo and mail revenues increased by 10.6% year over year to $32.03 million, attributed to higher cargo volumes from the addition of a second freighter operation [3] - Other operating revenues improved by 15.7% year over year to $17.22 million, driven by increased ConnectMiles revenues from non-air partners [3] Operational Metrics - Copa Holdings' traffic, measured in revenue passenger miles, grew by 10.1%, while capacity, measured in available seat miles, increased by 9.9% year over year [4] - The load factor rose by 0.2 percentage points to 86.4% as traffic growth outpaced capacity expansion [4] Cost and Expenses - Operating expenses rose by 11.6% year over year to $753.3 million, influenced by capacity growth, higher maintenance costs, and increased jet fuel prices [6] - Wages, salaries, and employee-related expenses increased by 11.6%, while sales and distribution costs grew by 10% [6] - Fuel expenses surged by 13.7% year over year, with the average fuel price per gallon rising by 5% to $2.50 [5][6] Financial Position - At the end of Q4 2025, Copa Holdings had cash and cash equivalents of $382.55 million, up from $248.82 million at the end of the previous quarter [7] - The company took delivery of four Boeing 737 MAX 8 aircraft in Q4 2025, ending the year with a total fleet of 125 aircraft, and added one more in January 2026, bringing the total to 126 [7] Future Outlook - For 2026, management anticipates consolidated capacity growth of 11-13% year over year, with an expected operating margin of 22-24% [8] - The fuel cost is projected to remain at $2.50 per gallon, with RASM expected to be 11.2 cents and a load factor of 87% [8] - Non-fuel unit costs are anticipated to be 5.7 cents, with plans to end 2026 with 133 aircraft [8]