LATAM Airlines Traffic Rises, Load Factor Falls In January

LATAM Airlines Group S.A. (NYSE:LTM) posted traffic numbers for January. Consolidated traffic (measured in revenue passenger kilometers or RPKs) came in at 11.52 billion, up 5.1% from the year-ago figure. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 6.1% to 13.47 billion.

However, consolidated load factor (percentage of seats filled by passengers) contracted 80 basis points (bps) to 85.5% as capacity expansion outweighed traffic growth. Meanwhile, passenger count rose 5.7% to 6.58 million.

With the company scheduled to release fourth-quarter earnings on Mar 12, let’s delve into its likely performance in the period. Encouraging passenger and cargo revenues are anticipated to boost the company’s top line in the to-be-reported quarter.

However, alike the last few quarters, depreciation of the Brazilian Real and Argentinian Peso are expected to hamper the company’s fourth-quarter results too.

Price Performance

Shares of the company have plunged more than 27% in a year’s time due to headwinds like high costs and depreciation of the Brazilian Real and Argentinian Peso.

Zacks Rank & Other Key Picks

LATAM carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the same space are Azul SA (NYSE:AZUL) , Air France-KLM SA (OTC:AFLYY) and SkyWest, Inc. (NASDAQ:SKYW) , each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Azul and Air France-KLM have rallied more than 63% and 18% in the past six months. Meanwhile, the SkyWest stock boasts a stellar earnings history, having outpaced the Zacks Consensus Estimate in each of the trailing four reported quarters, the average being 16.9%.

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