Earnings Preview: GOL Linhas A - Analyst Blog
August 10 2012 - 8:00AM
Zacks
GOL Linhas A (GOL) is scheduled to report its
second-quarter 2012 earnings on Monday, August 13, 2012, after the
closing bell.
The current Zacks Consensus Estimate is pegged at a loss of 46
cents for the quarter, representing an annualized growth of 42.8%.
With respect to earnings surprises, GOL underperformed the Zacks
Consensus Estimate in three of the last four quarters and was in
line in the other. Average earnings surprise was a negative
286.72%, implying that the company has underperformed the Zacks
Consensus Estimate by the same magnitude over the last four
quarters.
First Quarter 2012 Highlights
On May 4, 2012, GOL Linhas Aéreas Inteligentes S.A. reported
financial results for the first quarter of 2012 with a net loss of
R$41.4 million (US$23.4 million). The reported results compare
unfavorably with a net income of R$69.4 million (US$41.8 million)
in the year-ago quarter.
The loss was due to rising operating costs, especially fuel,
landing fees at Brazilian airports as well as currency depreciation
and income tax.
Consolidated net revenue stood at R$2,166.1 million (US$1223.8
million), up 14.3% year over year, attributable to operating
revenue of R$319.1 million (US$ 156.8 million) from Webjet during
the quarter.
Agreement of Estimate Revisions
In the last 30 days, none of the six analysts increased the
company’s earnings per share estimate while two decreased the same
for the second quarter of 2012. None of the analysts, among a total
of 6, revised the estimate for the third quarter of 2012 in the
last 30 days. For 2012, three out of 9 analysts lowered their
estimates. Out of 7 analysts, one analyst increased and one reduced
the estimate for 2013 in the last 30 days.
Magnitude of Estimate Revisions
Over the last 30 days, estimates have decreased from a loss of
35 cents per share to the current estimate of a loss of 46 cents
for the second quarter of 2012.
Estimate for 2012 dropped from a loss of 14 cents to a loss of
33 cents over the last 30 days while for 2013, it from rose from 34
cents to 38 cents. These estimates represented a year-over-year
growth of 78.58% for 2012 and 216.80% for 2013.
Our Take
We are optimistic on the company’s second quarter of 2012
results. We believe the company’s focus on operational cost
reduction and continued enhancement of fleet efficiency will
increase profitability. Moreover, GOL’s long-term business strategy
of route expansion and strategic acquisitions are likely to create
significant operational synergies.
GOL Linhas, one of the most profitable low-cost airlines in the
world, gives a tough competition to other industry players, such as
Copa Holdings SA (CPA) and LAN Airlines
S.A (LFL).
We currently maintain a long-term Neutral recommendation on the
stock. Also, GOL has a Zacks #3 Rank, which translates into a
short-term (1-3 months) Hold rating.
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
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