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Ryanair (RYAAY) Q4 Earnings and Revenues Beat Estimates

Zacks Equity Research
·4-min read

Ryanair Holdings RYAAY incurred a loss of $1.16 per share in fourth-quarter fiscal 2020 (ended Mar 31, 2020), narrower than the Zacks Consensus Estimate of a loss of $1.29. The loss deteriorated year over year.

Quarterly revenues of $1,323 million also surpassed the Zacks Consensus Estimate of $1,189 million. However, the top line suffered year over year due to the coronavirus-led drop in air travel demand.

Fiscal 2020 Results

Ryanair’s profit after tax plunged 26.7% year over year in fiscal 2020. The impact of coronavirus-led low demand for air travel was more than €40 million on profits.  Fiscal 2020 earnings per share came in at €0.58 per share, down 24.4% year over year. Total revenues ascended 10% to €8.5 billion owing to a 4% rise in traffic (149 million guests). Traffic decreased by more than 5 million due to travel restrictions and aircraft groundings, thanks to coronavirus. Load factor deteriorated to 95% from 96% in the year-ago period. Ancillary revenues rose 20% year over year for full fiscal 2020.

The airlines’ fuel costs increased 14% year over year. Additionally, non-fuel unit costs rose 4%, affected by a 48% slump in March traffic due to coronavirus-related woes.

Ryanair Holdings PLC Price, Consensus and EPS Surprise

 

Ryanair Holdings PLC Price, Consensus and EPS Surprise
Ryanair Holdings PLC Price, Consensus and EPS Surprise

Ryanair Holdings PLC price-consensus-eps-surprise-chart | Ryanair Holdings PLC Quote

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Balance Sheet Highlights

Ryanair, carrying a Zacks Rank #5 (Strong Sell), currently has a cash balance of €4.1 billion. Through stringent cost-cutting measures, the company has been able to reduce its average weekly cash burn rate to around €60 million in May, from approximately €200 million in March.

Outlook

Ryanair expects to operate less than 1% of its total scheduled flights in the first quarter of fiscal 2021. From July onward some of the flight services are expected to resume. However, with bookings anticipated to be affected by public health restrictions and mandatory quarantines, the carrier expects to carry only 50% of its second-quarter traffic guidance of 44.6 million guests.

The carrier expects to incur a loss of more than €200 million in the first quarter of fiscal 2021 as a result of the coronavirus-induced decline in traffic and low pricing. With the company anticipating a rise in demand during the peak summer season, losses are expected to decrease sequentially in second-quarter fiscal 2021. The carrier expects to transport less than 80 million passengers during fiscal 2021. This indicates an approximate 50% drop from its original target of 154 million passengers.
 
Performance of Other Airline Stocks

Gol Linhas Aereas Inteligentes GOL, carrying a Zacks Rank #3 (Hold), reported earnings of 20 cents per share (excluding $3.08 from non-recurring items) in first-quarter 2020. The bottom line increased year over year on cost-saving initiatives. Net operating revenues of $710.9 million missed the Zacks Consensus Estimate of $929.8 million and declined year over year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Southwest Airlines LUV, carrying a Zacks Rank #3, incurred loss of 15 cents per share (excluding 3 cents from non-recurring items) in the first quarter of 2020, narrower than the Zacks Consensus Estimate of 48 cents. In the year-ago quarter, the company reported earnings of 70 cents per share. The results reflect the coronavirus-induced drop in passenger demand. Meanwhile, operating revenues of $4,234 million lagged the Zacks Consensus Estimate of $4,397 million and declined 17.8% year over year.

American Airlines AAL, carrying a Zacks Rank #4 (Sell), incurred a loss (excluding $2.61 from non-recurring items) of $2.65 per share in first-quarter 2020, comparing unfavorably with the Zacks Consensus Estimate of a loss of $2.16. The company reported earnings per share of 52 cents in the year-ago quarter. Results in first-quarter 2020 were hurt by the coronavirus-led drop in air-travel demand. Operating revenues of $8,515 million declined 19.6% year over year and also fell short of the Zacks Consensus Estimate of $9,146.7 million.

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Southwest Airlines Co. (LUV) : Free Stock Analysis Report
 
Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report
 
Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report
 
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
 
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Zacks Investment Research