Controladora Vuela Compaia DE AD Down 10.83% To $9.23 After Earnings Miss

Friday, July 22, 2022 - Controladora Vuela Compaia DE AD (VLRS) reported downside earnings and upside revenues.

The consensus among analysts for Controladora Vuela Compaia DE AD was for an earnings per share (EPS) of $0.57. The firm failed to meet those projections, reporting an EPS loss of $0.42 per share, a negative surprise of $0.99 (-174%). Profits fell 163% year-over-year after reporting an EPS of $0.67 in its year-ago quarter. The negative growth rate signals that the Industrials company isn't performing well amid current economic conditions.

Consensus estimates for Controladora Vuela Compaia DE AD revenue averaged out to $602.8 million, with the business managing to beat those expectations with reported second-quarter revenue of $691 million. The $88.2 million (15%) positive revenue surprise led to 19% growth year-over-year as the firm reported revenue of $581 million in its year-ago quarter. The lower earnings growth compared to revenue points to Controladora Vuela Compaia DE AD not being able to improve its profit margin.

The stock is down 10.83% to $9.23 after the report.

The firm's higher revenue growth to earnings signals that the firm has not been able to reduce costs and has seen its profit margin decrease.

Wall Street Analysts had an average rating of Strong Buy on the stock prior to the report.

Trading in the five days leading up to the report earned Controladora Vuela Compaia DE AD a Bullish Sentiment Rank from InvestorsObserver.

Prior to the report, InvestorsObserver gave the stock an overall score of 51. Meanwhile, the average Wall Street analyst rated the stock a Strong Buy.

Controladora Vuela Compania de Aviacion SAB de CV is a low-cost airline flying to Mexico, the United States, Central and South America. It currently operates up to 500 average daily flight segments on routes that connect 44 cities in Mexico as well as 22 cities in the United States, four in Central America and two in South America. It uses promotional fares to stimulate demand and the base fares are priced to compete with long-distance bus fares in Mexico. Revenues from the air transportation of passengers are recognized earlier when the service is provided or when the non-refundable ticket expires at the date of the scheduled travel. Non-passenger revenues include revenues generated from other non-passenger revenues and cargo services.