GOL Linhas Aereas (GOL) reported a net loss (excluding one-time items) of R$14.9 million (US$8.3 million) for the second quarter of 2010 compared to a net profit of R$353.7 million (US$169.2 million) in the year-earlier quarter. Foreign exchange loss was the primary reason for the negative results. GOL reported a foreign exchange loss of R$29.9 million (US$16.6 million) in comparison to a gain of R$448.4 million (US$214.5 million) in the year-ago quarter based on the 1.2% appreciation of the U.S. Dollar against the Brazilian Real, which had a direct impact on foreign-currency debt comprising 80.6% of total debt.
GOL reported a loss per share of R$0.11 (6 cents per ADS) from an earnings of R$1.37 per share (76 cents per ADS). However, the Zacks Consensus Estimate was an EPS of 5 cents. One-time expenses includes expenditure of R$37 million (US$20.6 million) related to fleet replacement expense of B737-300s and B767-300/200s with 737-800NGs and 737-700NGs.
During the quarter, net revenues were R$1,590.9 million (US$883.8 million), up from R$1,394.0 million (US$667.0 million) in the corresponding quarter of 2009. The improvement in revenues is the result of the company's competitive advantages from greater flight frequency between domestic airports and low-cost leadership. Moreover, strong indicators of punctuality, regularity, safety, and differentiated client service, as well as increased demand from the domestic and international markets also pushed up revenues.
Operating costs and expenses based on revenues (excluding one-time item) grew only by 60 basis points to 94.1% from 93.5% in the second quarter of 2009.
Operating income (excluding one time item) stood at R$94.3 million (US$52.4 million) with a margin of 5.9% in comparison to $89.9 million (US$43.0 million) with a margin of 6.5% in the same period of 2009. The company reported an EBITDAR of R$311.2 million (US$172.9 million) with a margin of 19.5% in comparison to R$258.8 million (US$123.8 million) and a margin of 18.6% recorded in the second quarter of 2009.
As of June 30, 2010, GOL recorded a net debt of R$1,681.1 million (US$933.9 million), down from $1,740.0 million (US$961.3 million) at the end of the previous quarter. Cash position was R$1,589.3 million (US$882.9 million), with cash and cash equivalents and short-term investments of R$1,839.8 million (US$1,022.1 million), equivalent to 24.7% of annual net revenues, up 1.4% from the previous quarter.
GOL closed the quarter with a total fleet of 122 aircraft, with an average age of 6.8 years. During the quarter, the company took delivery of two Boeing 737-800NG SFPs to replace one Boeing 737-300, one Boeing 737-700 and four Boeing 737-800s.
During the quarter, domestic traffic grew 17.0% year over year and international traffic shot up by 13.7% based on the improved economic conditions and the considerable decrease in fuel costs in comparison to the second quarter of 2009.
GOL has started new routes and new fare categories, which also influenced the increase in passenger traffic. This is expected to continue in the short term if fuel costs do not increase significantly from current levels. Thus, our short-term rating remains Hold with the Zacks #3 Rank.
GOL LINHAS-ADR (GOL): Free Stock Analysis Report
Zacks Investment Research
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During the quarter, net revenues were R$1,590.9 million (US$883.8 million), up from R$1,394.0 million (US$667.0 million) in the corresponding quarter of 2009. The improvement in revenues is the result of the company's competitive advantages from greater flight frequency between domestic airports and low-cost leadership. Moreover, strong indicators of punctuality, regularity, safety, and differentiated client service, as well as increased demand from the domestic and international markets also pushed up revenues.
Operating costs and expenses based on revenues (excluding one-time item) grew only by 60 basis points to 94.1% from 93.5% in the second quarter of 2009.
Operating income (excluding one time item) stood at R$94.3 million (US$52.4 million) with a margin of 5.9% in comparison to $89.9 million (US$43.0 million) with a margin of 6.5% in the same period of 2009. The company reported an EBITDAR of R$311.2 million (US$172.9 million) with a margin of 19.5% in comparison to R$258.8 million (US$123.8 million) and a margin of 18.6% recorded in the second quarter of 2009.
As of June 30, 2010, GOL recorded a net debt of R$1,681.1 million (US$933.9 million), down from $1,740.0 million (US$961.3 million) at the end of the previous quarter. Cash position was R$1,589.3 million (US$882.9 million), with cash and cash equivalents and short-term investments of R$1,839.8 million (US$1,022.1 million), equivalent to 24.7% of annual net revenues, up 1.4% from the previous quarter.
GOL closed the quarter with a total fleet of 122 aircraft, with an average age of 6.8 years. During the quarter, the company took delivery of two Boeing 737-800NG SFPs to replace one Boeing 737-300, one Boeing 737-700 and four Boeing 737-800s.
During the quarter, domestic traffic grew 17.0% year over year and international traffic shot up by 13.7% based on the improved economic conditions and the considerable decrease in fuel costs in comparison to the second quarter of 2009.
GOL has started new routes and new fare categories, which also influenced the increase in passenger traffic. This is expected to continue in the short term if fuel costs do not increase significantly from current levels. Thus, our short-term rating remains Hold with the Zacks #3 Rank.
GOL LINHAS-ADR (GOL): Free Stock Analysis Report
Zacks Investment Research
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