Send me real-time posts from this site at my email

What's in Store for Avianca (AVH) This Earnings Season?

Shares of Avianca Holdings AVH have declined more than 8% so far this year due to multiple headwinds. Notably, this Latin-American carrier is expected to post earnings of 9 cents per share in first-quarter 2019, mirroring a 59.1% decline year over year. Revenues are expected to come in at $1.28 billion, up 9.4% from the year-ago quarter.

Factors Likely at Play

Passenger revenues, which account for bulk of the top line, are expected to increase on account of strong demand for air travel and boost the company’s top-line in the first quarter. Growing tourism to Columbia, where Avianca is a dominant player, is anticipated to drive the carrier’s passenger revenues in the to-be-reported quarter. Increase in ticket prices are also likely to aid revenue growth in quarter.

However, with oil prices on an upswing this year, operating expenses are likely to increase and hurt the bottom line. Expenses on aircraft rental are also expected to increase mainly due to the addition of new planes in line with its fleet modernization efforts. Ground expenses are too likely to increase mainly owing to higher navigation.

These apart, we expect an update on BRW Aviation’s (a controlling shareholder of Avianca), default under a loan agreement with United Airlines — a wholly owned subsidiary of United Continental Holdings UAL.

Estimate Revisions Trend & Surprise History

Investors should note that the earnings estimate revisions depicts a stable picture ahead of its earnings release. The Zacks Consensus Estimate for Avianca Holdings’ first-quarter earnings has remained unchanged over the past 60 days.

Additionally, Avianca Holdings does not have an impressive track record with respect to earnings per share. The carrier, which competes with the likes of GOL Linhas GOL in the Latin-American aviation space, surpassed the Zacks Consensus Estimate only once in the trailing four reported quarters. It posted in-line earnings in two quarters and missed the consensus mark in another.

Avianca Holdings S.A. Price and EPS Surprise


Avianca Holdings S.A. Price and EPS Surprise | Avianca Holdings S.A. Quote


What Does the Zacks Model Say?

Our model indicates that Avianca Holdings might not beat on earnings in the to-be-reported quarter. This is because a stock needs to have — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Avianca Holdings has an Earnings ESP of 0.00%. The Most Accurate Estimate is in line with the Zacks Consensus Estimate.

Zacks Rank: Avianca Holdings carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Pick

Investors interested in the Zacks Transportation sector may consider International Seaways INSW as it possesses the right combination of elements to beat on earnings in its next quarterly release.

International Seaways, scheduled to report first-quarter 2019 results on May 9, has an Earnings ESP of +3.60% and a Zacks Rank #3.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report
Avianca Holdings S.A. (AVH): Free Stock Analysis Report
International Seaways Inc. (INSW): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research

Welcome!!! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue