Copa Holdings Q1 Earnings & Revenues Beat Estimates, Both Up Y/Y

Copa Holdings CPA first-quarter 2025 earnings per share of $4.28 surpassed the Zacks Consensus Estimate of $3.77 and improved 2.2% year over year. Revenues of $899.2 million beat the Zacks Consensus Estimate of $889.5 million and inched up 0.6% year over year, due to an 8.7% increase in onboard passengers.

Passenger revenues (which contributed 95.6% to the top line) remained flat year over year at $859 million. Despite the increase in onboard passengers, a 9.1% decrease in yield hurt passenger revenues. 

Cargo and mail revenues of $25.7 million improved 17.3% year over year. Other operating revenues of $14.5 million grew 12.7% year over year, owing to an increase in Connect Miles revenues from non-air partners. The operating margin declined 0.4 percentage points from the year-ago quarter to 23.8%.

Copa Holdings Price, Consensus and EPS Surprise

Copa Holdings price-consensus-eps-surprise-chart | Copa Holdings Quote

CPA’s Other Financial Details

On a consolidated basis, Copa Holdings’ traffic (measured in revenue passenger miles) grew 10.1% and capacity (measured in available seat miles) increased 9.5% from the year-ago quarter. Since traffic growth outpaced capacity expansion, the load factor (percentage of seats filled by passengers) increased 0.4 percentage points to 86.4% in the reported quarter. The actual figure was higher than our estimate of 85.9%.

Passenger revenue per available seat mile dipped 8.7% year over year to 11 cents. Revenue per available seat mile (“RASM”) declined 8.1% year over year to 11.5 cents. Cost per available seat mile dipped 7.7% year over year. Excluding fuel, the metric fell 4.3% year over year. The average fuel price per gallon decreased 12.4% year over year to $2.54.

Total operating expenses increased 1.2% year over year to $685.4 million, with expenses on wages, salaries, benefits and other employee expenses rising 2.8%. Maintenance, materials and repairs jumped 53.9% year over year. Sales and distribution costs decreased 9.4% year over year. Passenger servicing costs fell 15.7% from the year-ago quarter. Other operating and administrative expenses increased 9.3% from the first quarter of 2024.

Copa Holdings exited the first quarter with cash and cash equivalents of $164.8 million compared with $613.3 million at 2024-end. Total debt, including lease liabilities, was $1.9 billion.

During the first quarter, CPA exercised options for six additional Boeing 737 MAX-8 aircraft, which are expected to be delivered in 2028. CPA ended 2024 with a consolidated fleet of 112 aircraft, which comprises 67 Boeing 737-800s, 32 Boeing 737 MAX 9s, nine Boeing 737-700s, three Boeing 737 MAX 8 and one Boeing 737-800 freighter.

CPA’s 2025 Outlook

CPA’s management expects consolidated capacity to grow 7-8% year over year and the operating margin is expected to be in the range of 21-23%, driven by the anticipation of low fuel costs. RASM is expected to be 11.2 cents.

The load factor for the current year is expected to be 86.5%. Non-fuel unit costs are anticipated to be 5.8 cents. The fuel cost is expected to be $2.40 per gallon. Copa Holdings expects to end 2025 with 125 aircraft and 2026 with 131 aircraft.

CPA’s Zacks Rank

Currently, CPA carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We note that another player from the broader Zacks Transportation sector, Landstar System LSTR, will report its first-quarter earnings numbers later this month. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Landstar System is scheduled to report first-quarter 2025 earnings on May 13. The company’s performance in the first quarter is expected to have suffered from weak freight demand, geopolitical uncertainty, tariff-related uncertainties and high inflationary pressure.

LSTR’s earnings have outpaced the Zacks Consensus Estimate in two of the last four quarters (missing the mark on the other two occasions). The average miss is 0.6%.

Q1 Performances of Other Airline Companies

United Airlines’ UAL first-quarter 2025 earnings per share (excluding 25 cents from non-recurring items) of 91 cents surpassed the Zacks Consensus Estimate of 75 cents. In the year-ago quarter, the Chicago-based airline reported a loss of 15 cents per share. 

Operating revenues of $13.21 billion fell marginally short of the Zacks Consensus Estimate of $13.22 billion. The top line increased 5.4% year over year despite the tariff-induced slowdown in domestic air travel demand. Passenger revenues (which accounted for 89.7% of the top line) rose 4.8% to $11.9 billion. UAL flights transported 40,806 passengers in the first quarter, up 3.8% year over year.

Delta Air Lines DAL reported first-quarter 2025 earnings (excluding 9 cents from non-recurring items) of 46 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents. Earnings increased 2.2% on a year-over-year basis due to low fuel costs.

Revenues in the March-end quarter were $14.04 billion, surpassing the Zacks Consensus Estimate of $13.81 billion and increasing 2.1% on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) rose 3.3% year over year to $13 billion.

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This article originally published on Zacks Investment Research (zacks.com).

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