Azul (AZUL) Q4 Loss Wider Than Estimates, Revenues Miss
Azul S.A. AZUL incurred a loss (excluding $1.14 from non-recurring items) of 83 cents per share in the fourth quarter of 2022, wider than the Zacks Consensus Estimate of a loss of 26 cents. It reported a loss per share of 58 cents in the fourth quarter of 2021.
Total revenues of $846.3 million missed the Zacks Consensus Estimate of $899 million but increased 26.6% year over year, as air-travel demand improved. With more people taking to the skies, Azul’s passenger revenues, contributing 92.5% to the top line, increased 21.3% year over year (on higher total capacity).
Cargo and other revenues declined 0.1% year over year due to a reduction in the international cargo capacity, partially offset by a solid domestic demand for AZUL’s logistics solutions and exclusive network.
Operating Statistics
Consolidated traffic, measured in revenue passenger kilometers, rose 4.8% (down 8.9% in domestic and increased more than 100% internationally) year over year. Consolidated available seat kilometers (ASK), measuring an airline's passenger-carrying capacity, increased 10.3% from the same-period level last year with a 175.5% rise in international capacity. The same declined 3.3% on the domestic front. Since the traffic surge was less than the amount of capacity expansion, the load factor (percentage of seats filled with passengers) fell 4.1 percentage points to 78.1%.
Azul’s total revenues per ASK or RASK rose 8.2% and passenger revenues per ASK increased 10% year over year. Results were driven by a strong domestic demand environment in Azul’s markets.
Cost per ASK (CASK) increased 11.1% from the fourth quarter of 2021 to 37.68 cents mainly due to a rise in jet fuel prices. Fuel cost per liter increased 42.5% from the fourth quarter of 2021, with oil prices moving north.
CASK excluding fuel fell 3.9% to 20.67 cents due to the company’s fleet transformation, cost-reduction initiatives, productivity gains and capacity increase. Average fare increased 24.1% from fourth-quarter 2021.
Liquidity
Azul exited the fourth quarter with total liquidity of R$5.9 billion. Gross debt decreased 5.3% year over year, owing to its continued deleveraging process and appreciation of the Brazilian real.
Currently, Azul carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Transportation Companies
United Airlines’ UAL fourth-quarter 2022 earnings of $2.46 per share beat the Zacks Consensus Estimate of $2.07. In the year-ago quarter, UAL incurred a loss of $1.60 per share when air-travel demand was not as buoyant as in the current scenario. The fourth quarter of 2022 was the third consecutive profitable quarter at UAL since the onset of the pandemic.
Operating revenues of $12,400 million beat the Zacks Consensus Estimate of $12,230 million. UAL’s revenues increased 51.37% year over year due to upbeat air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.9% from the fourth-quarter 2019 (pre-coronavirus) level.
Delta Air Lines’ DAL fourth-quarter 2022 earnings (excluding 19 cents from non-recurring items) of $1.48 per share beat the Zacks Consensus Estimate of $1.29 per share. DAL reported earnings of 22 cents per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $13,435 million, which surpassed the Zacks Consensus Estimate of $13,030.3 million. Driven by the high air-travel demand, total revenues increased more than 41.87% on a year-over-year basis.
J.B. Hunt Transport Services, Inc.’s JBHT fourth-quarter 2022 earnings of $1.92 per share missed the Zacks Consensus Estimate of $2.45 and declined 16% year over year.
JBHT’s total operating revenues of $3,649.62 million lagged the Zacks Consensus Estimate of $3,796.8 million. The top line jumped 4.4% year over year. Total operating revenues, excluding fuel surcharges, fell 2.9% year over year.
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