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LATAM Airlines (LTM) to Post Q4 Earnings: Is a Beat in Store?

Zacks Equity Research

 LATAM Airlines Group S.A. LTM is slated to report fourth-quarter 2019 financial numbers on Mar 3, after market close.

The company has an average track record with respect to earnings per share, having outperformed the Zacks Consensus Estimate in two of the last four quarters. It reported lower-than-expected earnings per share in the other two quarters. The company has trailing four-quarter negative earnings surprise of 45.2%, on average.

LATAM Airlines Group S.A. Price and EPS Surprise

 

LATAM Airlines Group S.A. Price and EPS Surprise
LATAM Airlines Group S.A. Price and EPS Surprise

LATAM Airlines Group S.A. price-eps-surprise | LATAM Airlines Group S.A. Quote

 

Considering this, let’s discuss the factors that might have influenced the company’s performance in the quarter under review.

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Passenger revenues are likely to have been impacted by  strong performance in the domestic markets during the quarter to be reported. Moreover, lower non-fuel unit costs are expected to have boosted the company’s bottom line in the fourth quarter.

Akin to the last few quarters, currency-related headwind is likely to have had a negative impact on fourth-quarter performance of LATAM Airlines, which competes with the likes of Copa Holdings CPA and Gol Linhas Aereas Inteligentes S.A. GOL in the Latin American aviation space. Declining cargo revenues and slow import markets might have affected fourth-quarter financial numbers as well.

What Does the Zacks Model Say

Our proven model conclusively predicts an earnings beat for LATAM Airlines this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: LATAM Airlines has an Earnings ESP of 6.38% as the Most Accurate Estimate is pegged at 25 cents, a penny higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank:  LATAM Airlines carries a Zacks Rank #2, currently.

Highlights of Q3 Earnings

The carrier's earnings of 14 cents per share lagged the Zacks Consensus Estimate by 2 cents. Moreover, quarterly earnings improved 55.6% year over year. The upside can be attributed to 11.4% decline in average fuel price per gallon. Total revenues also increased year over year to $2,592 million but missed the Zacks Consensus Estimate of $2,654 million.

Other Stock to Consider

Investors may also consider Azul AZUL as it possesses the right combination of elements to come up with an earnings beat in its next release.

AZUL sports a Zacks Rank #1 and has an Earnings ESP of +16.13%. The company is slated to report fourth-quarter 2019 figures on Mar 12.

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Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report
 
Copa Holdings, S.A. (CPA) : Free Stock Analysis Report
 
LATAM Airlines Group S.A. (LTM) : Free Stock Analysis Report
 
AZUL SA (AZUL) : Free Stock Analysis Report
 
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Zacks Investment Research