Earnings Preview: GOL Linhas A - Analyst Blog
March 23 2012 - 8:30AM
Zacks
GOL Linhas A
(GOL) will be reporting its
fourth-quarter and fiscal 2011 earnings on Monday, March 26,
2012.
The current Zacks Consensus
Estimate for earnings per share (EPS) is a meager 2 cents,
representing an annualized loss of 92.61%.
With respect to earnings surprises
over the trailing four quarters, GOL outperformed the Zacks
Consensus Estimate in one and underperformed in the rest of the
quarters. Average earnings surprise was a negative 198.32%,
implying that the company underperformed the Zacks Consensus
Estimate by the same magnitude over the last four quarters.
Third-Quarter 2011
Highlights
On November 10, 2011, GOL Linhas A
reported financial results for the third quarter of fiscal 2011.
Net loss in the quarter was R$516.5 million (US$316.9 million)
compared with a net income of R$110.0 million (US$63.2million) in
the year-ago quarter.
The loss was primarily attributable
to the depreciation of the Brazilian currency against the US
dollar, which generated a huge net expense from the foreign
exchange variation as most of the company’s financial liabilities
are represented in dollars.
During the third quarter, net
revenue was R$1,843.7 million (US$1,131.1 million), up 3.1% year
over year and 17.7% sequentially. The year-over-year increase
reflected a rise of 10.4% in demand on the company’s route network,
leading to a growth in load factor. In addition, ancillary revenues
increased by 12.5% and accounted for approximately 11.5% of total
net revenue.
The load factor on GOL’s route
network reached 71.5% in 3Q11, up from 68.4% reported in 3Q10.
GOL's domestic demand increased 13.5%, mainly due to the fare
discounts, whereas international route network fell by 16.1% over
the prior-year quarter. Supply on GOL’s total route network
increased by 5.7% due to a rise in fleet productivity, occupancy
rate and higher number of destinations.
Agreement of Estimate
Revisions
In the last 30 days, no analyst
increased or decreased the company’s earnings per share (EPS)
estimates for the fourth quarter of 2011. Moreover, for both fiscal
2011 and 2012, none of the analysts increased or decreased their
estimate as there was no catalyst for such change.
Magnitude of Estimate
Revisions
Estimates over the last 30 days
remained static at 2 cents per share for the fourth quarter of
2011. The estimate represents a year-over-year decline of
92.61%.
Estimate for fiscal 2011 also
remained stationery at a negative $1.21 over the last 30 days while
that for fiscal 2012, showed a similar trend remaining unchanged at
a positive 39 cents. These estimates represented a year-over-year
decline of 352.08% for 2011 while a growth of 132.60% for 2012.
Our Take
We are concerned regarding the
upcoming results as the company continues to reel under high
operational costs. Costs pertaining to the competitive aviation
market, airport infrastructural crisis as well as those incurred on
salaries, wages and benefits add to the woe. Besides, the risk of
overt dependence on a few big suppliers and governmental
intervention may exert further pressure on the stock.
GOL Linhas is the first Brazilian
low-fare airline connecting the cities of Brazil as well as those
in Argentina, Bolivia, Chile, Paraguay, Peru and Uruguay. It
competes directly with its peers, such as Copa Holdings
SA (CPA), LAN Airlines S.A (LFL), and
TAM S.A (TAM).
COPA HLDGS SA-A (CPA): Free Stock Analysis Report
GOL LINHAS-ADR (GOL): Free Stock Analysis Report
LAN CHILE-ADR (LFL): Free Stock Analysis Report
TAM SA-ADR (TAM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Gol Linhas Aereas Inteli... (NYSE:GOL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Gol Linhas Aereas Inteli... (NYSE:GOL)
Historical Stock Chart
From Jul 2023 to Jul 2024