Copa Holdings Q3 Profit Declines, Yet Beats View; Revenues Miss

(RTTNews) - Copa Holdings, S.A. (CPA), a Latin American provider of passenger and cargo services, on Wednesday reported a 48 percent decline in profit for the third quarter from last year, reflecting lower revenues and higher expenses.

However, adjusted earnings per share for the quarter beat analysts' expectations, while revenues missed their estimates.

The Panama City-based company's net income for the third quarter was $65.98 million or $1.49 per share, down from $126.01 million or $2.84 per share in the prior-year quarter.

The latest quarter's results include an unrealized gain on fuel hedging instruments of $28.29 million and a gain due to devaluation of the Venezuelan Bolivar of $5.52 million. The prior-year quarter's results included loss on fuel hedging instruments of $9.82 million.

Excluding special items, adjusted net income for the quarter was $99.79 million or $2.25 per share, compared to $116.19 million or $2.62 per share in the year-ago period. On average, thirteen analysts polled by Thomson Reuters expected the company to report earnings of $1.99 per share for the quarter. Analysts' estimates typically exclude special items.

Total operating revenues for the quarter declined 2 percent to $663.69 million from $677.28 million in the previous-year quarter. Analysts had a consensus revenue estimate of $686.78 million.

Passenger revenue declined 2 percent from last year to $643.72 million, while cargo, mail and other revenue decreased 6 percent to $19.97 million.

Total operating expenses for the quarter rose 4.3 percent to $552.63 million, including a 7.3 percent increase in aircraft fuel expenses.

Passenger traffic, measured in revenue passenger miles or RPMs, grew 6.3 percent to 4.04 million, on an 8.7 percent capacity expansion to 5.30 million available seat miles or ASMs. As a result, consolidated load factor came in at 76.3 percent, or 1.7 percentage points below the year-ago period.

Yield per passenger mile decreased 7.7 percent from the year-ago period to 15.9 cents, while operating revenue per available seat mile or RASM decreased 9.9 percent to 12.5 cents. Passenger revenue per available seat mile or PRASM declined 9.8 percent to 12.2 cents.

Operating margin for the quarter was 16.7 percent, down 5 percentage points from the year-ago period as a result of lower unit revenues.

Copa Holdings' board of directors approved a $250 million share repurchase program. The company said it will make share purchases from time to time, subject to market and economic conditions, applicable legal requirements, and other relevant factors.

Copa Holdings expects to pay its fourth-quarter dividend of $0.96 per share on December 15, 2014, on all its outstanding Class A and Class B shares, to stockholders of record as of December 4, 2014.

CPA closed Wednesday's trading at $117.06, up $0.99 or 0.85 percent on a volume of 948,031 shares. In after-hours, the stock declined $0.06 or 0.05 percent to $117.00.