Copa Holdings (CPA) Q1 Earnings & Revenues Beat, Up Y/Y

Core Insights - Copa Holdings, S.A. (CPA) reported first-quarter 2024 earnings per share of $4.19, exceeding the Zacks Consensus Estimate of $3.27 and reflecting a 5% year-over-year improvement [1] - Revenues reached $893.5 million, surpassing the Zacks Consensus Estimate of $846.2 million, and increased by 3% year over year, driven by strong passenger revenues [1] Revenue Breakdown - Passenger revenues, which accounted for 96.1% of total revenues, rose by 3% compared to the first quarter of 2023, primarily due to increased capacity [2] - Cargo and mail revenues decreased by 5.8% to $21.91 million, attributed to lower cargo yields [2] - Other operating revenues increased by 28.4% year over year to $12.83 million [2] Operational Metrics - Copa Holdings' traffic, measured in revenue passenger miles, grew by 7.1% year over year, while capacity, measured in available seat miles, increased by 8% [3] - The load factor decreased by 0.7 percentage points to 86% due to traffic growth lagging behind capacity expansion [3] - Passenger revenue per available seat mile fell by 4.6% year over year to 12.1 cents, and revenue per available seat mile (RASM) also declined by 4.6% to 12.5 cents [4] Cost Analysis - Total operating expenses rose by 0.5% year over year to $677.5 million, driven by higher capacity but offset by lower fuel and maintenance costs [5] - Wages, salaries, and employee benefits increased by 11.4%, while sales and distribution costs decreased by 9.6% [5] - Passenger servicing costs surged by 45.6%, and flight operation costs increased by 13.1% [5] Financial Position - At the end of the first quarter, Copa Holdings had cash and cash equivalents of $170.52 million, down from $206.37 million at the end of the fourth quarter [6] - Total debt, including lease liabilities, remained stable at $1.7 billion [6] - The consolidated fleet consisted of 106 aircraft, including various models of Boeing 737 [6] 2024 Outlook - Management expects consolidated capacity to grow by 10% year over year, with an anticipated operating margin of 21%-23% [7] - The load factor is projected to be 87%, and RASM is expected to be 12.0 cents [7] - Non-fuel unit costs and fuel cost per gallon are anticipated to be 5.9 cents and $2.85 per gallon, respectively [7]