GOL Linhas Aereas Inteligentes S.A. (GOL) reported third-quarter 2014 net loss per share of approximately 14 cents, wider than the Zacks Consensus Estimate of a loss of 9 cents. The loss, however, compared favorably with the year-ago loss of 31 cents per share.
A decline in domestic supply hurt the quarter’s results. The company reported third-quarter net loss of R$245.1 million (approximately $96 million), higher than the year-ago net loss of R$197 million (approximately $77.1 million).
Revenues
Net revenue increased 10.4% year over year to R$2,461.7 million (approximately $960 million), missing the Zacks Consensus Estimate of $962 million by a small margin. Increased demand and load factor in addition to the company’s efforts to enhance service for its customers accounted for the year-over-year growth.
Passenger revenues grossed R$2,189.3 million ($856.4 million) while cargo revenues totaled R$272.3 million ($106.5 million).
Operational Statistics
Revenue passenger kilometers (RPK) – implying revenue generated per kilometer per passenger –improved 9.2% year over year to 9,459 million. International RPK spiked 30.3% while domestic RPK rose 6.8%.
Available Seat kilometers (ASK) – that measures an airline's passenger carrying capacity – declined 2% year over year to 12,201 million. ASK in the domestic market reduced 4.2% against 15.5% growth on the international front.
During the reported quarter, the company’s total load factor stood at 77.5%, up 790 basis points (bps) from the year-ago quarter. Domestically, load factor moved up 810 bps while internationally, it rose 830 bps.
Margins
Operating costs and expenses in the quarter increased 5.3% to R$2,309 million (approximately $903.2 million).
Third-quarter 2014 operating income (EBIT) improved to R$152 million (approximately $59.5 million).
Financials
Exiting the third quarter of 2014, GOL had cash and cash equivalents of R$1,942.3 million (approximately $760 million) against R$1,635.7 million (approximately $640 million) at the end of 2013. Long-term debt came in at R$4,840.4 million (approximately $1,893.4 million) in the reported quarter as against R$5,148.6 million (approximately $2,013.9 million) at the end of 2013.
Outlook
For 2014, the company expects a negative 1–3% variation in domestic capacity, while growth in international market is projected at around 8%. GOL expects Brazil’s GDP growth rate to be in the range of 1.5%–2.0% for 2014. The company expects RASK (revenue per available seat kilometer) growth of 10% or above and CASK (cost of available seat kilometer) growth, excluding fuel growth, of around 10% or below. In keeping with these views, GOL expects EBIT margin of 3–6% in 2014.
Zacks Rank
GOL currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the airline space include Spirit Airlines (SAVE), Southwest Airlines (LUV) and Republic Airways Holdings (RJET). All these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment