Copa Holdings Q1 profit slides 49 pct

* Copa’s net income $36.7 mln vs $71.6 mln year-ago

* Company hit by Venezuelan devaluation, hedging

PANAMA CITY, May 5 (BestGrowthStock) – Copa Holdings S.A. (CPA.N: ),
the parent of Panama-based Copa Airlines, said on Wednesday its
first-quarter net income fell 49 percent to $36.7 million, hit
by currency charges and higher fuel costs.

The company, which also owns Colombia’s Aero Republica,
reported diluted earnings per share of $0.84 for the quarter.
The results compared to a net profit of $71.6 million, or $1.63
per share, in the same period a year earlier.

The weaker results were in part due to a $19.8 million
charge related to the devaluation of the Venezuelan currency in
the first quarter and a noncash charge associated with the
mark-to-market of fuel hedge contracts.

Copa said it was also hit by a stronger Colombian currency,
increased maintenance charges and expenses related to
additional capacity to support growth in the second half of
this year.

The weaker profit was despite an 11 percent increase in
consolidated passenger traffic in the quarter.

The company also declared an annual dividend of $1.09 per

Analysts say Copa Holdings has been one of the industry’s
best performers in recent years and the airline is expecting
2010 operating margins of 20 percent or higher.

The geographical location of its hub airport in Panama
City, relatively low competition and the strength of Panama’s
economy have contributed to the carrier’s performance, say

With the bulk of Copa’s traffic coming from low density
routes, analysts do not expect Copa Holdings to face sterner
competition in the near future.

“We don’t envision any big changes medium-term,” said
Stephen Trent, an analyst at Citibank in New York.

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(Reporting by Sean Mattson; Editing by Phil Berlowitz)

Copa Holdings Q1 profit slides 49 pct