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Gol Linhas' (GOL) Q1 Earnings & Revenues Beat, Stock Up

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Gol Linhas Aereas Inteligentes GOL incurred a loss (excluding $3.15 from non-recurring items) of 63 cents per share in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 67 cents. The amount of loss narrowed year over year.

Net operating revenues of $616.2 million outperformed the Zacks Consensus Estimate of $603.2 million. The top line not only surged more than 100% year over year, but also came in above the first quarter of 2019. Passenger revenues, accounting for 93.5% of total revenues, rose more than 100%, thanks to continued recovery in air-travel demand in Brazil. Following the better-than-expected performance, shares of Gol Linhas rose 3.9% at the close of business on Apr 28.

Cargo and other revenues jumped 37.9%. Gol Linhas transported 6.7 million passengers in the first quarter, up 49.5% from the year-ago period. However, the same was down 26.6% from the first quarter of 2019, reflecting the softness in travel demand compared with the pre-coronavirus level.

Gol Linhas Aereas Inteligentes S.A. Price, Consensus and EPS Surprise

Gol Linhas Aereas Inteligentes S.A. Price, Consensus and EPS Surprise
Gol Linhas Aereas Inteligentes S.A. Price, Consensus and EPS Surprise

Gol Linhas Aereas Inteligentes S.A. price-consensus-eps-surprise-chart | Gol Linhas Aereas Inteligentes S.A. Quote

Operational Statistics

Consolidated revenue passenger kilometers (RPK), the measure for revenues generated per kilometer per passenger, increased 46.5% from the first quarter of 2021. The carrier transported 104,136 passengers in the international market during the first quarter.

Consolidated available seat kilometers (ASK), which measures an airline's passenger-carrying capacity, also climbed 44.4% year over year with an increase in domestic capacity.

Gol Linhas’ total load factor (percentage of seats filled with passengers) was 81% in the quarter, an improvement of 1.1 percentage points year over year due to traffic increasing more than capacity expansion. Net yield climbed 45.2% year over year.

Net passenger revenues per ASK ascended 47.2%, while net revenues per ASK jumped 42.2%. Average fuel price per liter increased by 60.6%. Cost per ASK inched up 4% year over year. Excluding fuel, the metric declined 11.9%. Meanwhile, total operating expenses surged 50.4% year over year, primarily due to a significant increase in fuel costs.

Gol Linhas, carrying a Zacks Rank #3 (Hold), exited the first quarter with total liquidity (cash and cash equivalents, cash investments, restricted cash, accounts receivable, and securities and receivables) of R$3.3 billion, up 94.1% sequentially.

During the first quarter, operating activities generated cash of R$0.7 billion compared with R$1.1billion in the fourth quarter of 2021. Long-term debt totaled R$20.07 billion at the end of the reported quarter, nearly flat sequentially.

Gol Linhas’ fleet, at the end of the reported quarter, comprised of 142 Boeing 737 aircraft (111 NGs and 31 MAXs). The average age of the fleet was 10.3 years.

2022 Outlook

Gol Linhas expects capacity to increase 65-75% year over year in 2022. The company estimates load factor to be 82% in the year. Total net revenues are expected to be R$13.7 billion in the current year. Fuel price per liter is predicted to be R$4.3 in the year. EBITDA margin is anticipated to be 24% while EBIT margin is forecast to be 10%. Effective income tax rate is estimated to be 0% in the year. Net capital investments are predicted to be R$700 million. The company expects break-even earnings for the full year.

Performance of Other Airline Stocks

Alaska Air Group ALK, carrying a Zacks Rank #2 (Buy), incurred a loss (excluding 19 cents from non-recurring items) of $1.33 per share in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of $1.58. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Alaska Air’s operating revenues of $1,681 million outperformed the Zacks Consensus Estimate of $1,669.3 million. The top line surged more than 100% year over year with passenger revenue soaring more than 100% owing to an improvement in air-travel demand from the pandemic-induced lows.

Southwest Airlines LUV, carrying a Zacks Rank #3, incurred a loss (excluding 15 cents from non-recurring items) of 32 cents in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 34 cents. Results were hurt by Omicron-induced woes in January and February.

Southwest’s operating revenues of $4694 million outperformed the Zacks Consensus Estimate of $4,663.8 million and also jumped more than 100% year over year. Passenger revenues improved more than 100% year over year.


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