Abstract

LATAM Airlines Group SA is scheduled to report quarterly results on May 5, 2026, Post Market; our preview synthesizes the latest historical performance, consensus expectations for revenue, profitability and EPS, and the prevailing institutional stance ahead of the print.

Market Forecast

For the forthcoming quarter, market expectations point to total revenue of 4.00 billion US dollars, implying year-over-year growth of 13.74%, alongside an EPS estimate of 1.195, up 91.71% year over year, and EBIT of 0.53 billion US dollars, up 1.81% year over year. There is no explicit margin outlook in the current dataset; investors will watch whether margin resilience can be sustained against fuel and currency headwinds, especially given last quarter’s gross margin baseline.

Passenger operations remain the primary revenue engine, and the near-term outlook centers on sustaining high load factors and yield discipline as capacity rises. The most promising performance lever this quarter is international passenger traffic, where recent updates indicate double-digit year-over-year growth in demand; last quarter’s passenger revenue contribution was approximately 3.43 billion US dollars, supported by group revenue growth of 14.12% year over year.

Last Quarter Review

In the previous quarter, LATAM Airlines Group SA delivered revenue of 3.87 billion US dollars, a gross profit margin of 29.87%, net profit attributable to the parent of 0.48 billion US dollars, a net profit margin of 12.50%, and EPS of 0.001 US dollars, which was flat year over year. Net income momentum accelerated sequentially, with net profit rising 27.84% quarter over quarter, and EBIT reached 0.66 billion US dollars, up 45.73% year over year.

By business line, passenger services accounted for roughly 88.41% of revenue and cargo 11.59%. Applying these shares to last quarter’s revenue implies approximately 3.43 billion US dollars in passenger revenue and 0.45 billion US dollars in cargo revenue; group revenue grew 14.12% year over year, with higher capacity and load factors underpinning topline gains.

Current Quarter Outlook

Core Passenger Franchise

Passenger operations drive the bulk of the company’s earnings power and are set to define this quarter’s print. The revenue estimate of 4.00 billion US dollars alongside an EPS estimate of 1.195 suggests the market expects solid unit revenue performance despite ongoing capacity additions. Recent operating updates point to healthy demand trends, with March traffic up roughly 12% year over year and the first quarter load factor above 85%, indicating successful demand stimulation and seat inventory management. The central question for this quarter is the interaction between capacity growth and yields: pricing needs to remain firm enough to protect margins as available seat-kilometers rise.

With last quarter’s gross margin at 29.87% and EBIT of 0.66 billion US dollars, the company demonstrated robust conversion of revenue into operating income. For this quarter, the consensus EBIT estimate of 0.53 billion US dollars on 4.00 billion US dollars of revenue implies an EBIT margin near 13.29%, lower than last quarter’s implied 16.94% but consistent with seasonality and a shifting cost mix. The spread between fuel costs and fares, along with currency translation into US dollars, will be the most important variables influencing margin trajectory. High load factors create room for yield support, but the elasticity of leisure and VFR demand to fare increases needs monitoring as capacity continues to expand.

International Network as the Key Upside Lever

International passenger traffic stands out as the most promising near-term segment based on recent performance indicators and the expected mix this quarter. Capacity and traffic updates show international demand up nearly 13% year over year in March and a positive unit revenue backdrop into early April, signaling momentum into the quarter being reported. This demand strength matters because long-haul and regional international routes typically carry higher absolute revenue per passenger, supporting topline lift even if unit margins are mixed by route. Stronger connecting flows and recovering corporate volumes can add incremental yield support where schedules and alliances optimize connectivity.

In last quarter’s mix, passenger services approximated 3.43 billion US dollars of revenue versus about 0.45 billion US dollars for cargo. Entering the new quarter, the international passenger sub-mix is positioned to carry that momentum forward, driven by schedule additions and network optimization on high-demand corridors. The main watchpoints are competition-induced yield pressure on overlapping routes and any softness in premium demand that could cap the revenue per available seat-kilometer uplift. Still, if load factors remain in the mid-80s and fares hold in line with recent trends, the international segment can underpin the 13.74% group revenue growth expectation.

Stock Price Drivers: Fuel, FX, Capacity Discipline, and Operating Leverage

Fuel costs and hedging will be decisive for equity sentiment around this print. The current quarter’s profitability outlook implicitly assumes manageable fuel expense, with partial hedging in place to dampen volatility. If spot prices drift higher than assumed, the pass-through capacity via fares becomes the key buffer; as evidenced by institutional commentary, there is confidence that fare increases can offset a portion of elevated fuel costs, but timing and elasticity remain uncertainties. The difference between the realized fuel bill and implied hedged levels will directly feed through to operating margin variance versus consensus.

Currency is the second major swing factor. A stronger US dollar against regional currencies can pressure reported US-dollar revenue and margin even when local-currency performance is solid. Conversely, any stabilization in the Brazilian real and Chilean peso would support translation, especially for domestic operations in Brazil and regional exposure. Given the revenue estimate of 4.00 billion US dollars and EBIT estimate of 0.53 billion US dollars, small FX moves can materially influence the final EPS outcome, which markets expect to be 1.195. Monitoring spot FX into the release is prudent for framing potential deltas to consensus.

Capacity discipline and cost control round out the near-term valuation drivers. The previous quarter’s margin profile—29.87% gross margin and 16.94% implied EBIT margin—set a high-quality baseline. To sustain EPS expansion, management needs to hold non-fuel unit costs in check even as network complexity increases. Fleet utilization, on-time performance, and labor productivity contribute to keeping CASK ex-fuel stable, which will be crucial if fuel or FX headwinds intensify. The positive sequential trend in net income (27.84% QoQ growth in net profit attributable to the parent) also creates a favorable setup if operating leverage persists with rising volumes.

Cargo: Stabilization and Margin Relevance

Cargo contributed roughly 0.45 billion US dollars last quarter, representing about 11.59% of total revenue based on the mix. While this is a smaller slice than passenger operations, cargo remains important for margin stability and aircraft utilization, particularly on widebody routes that can monetize belly capacity effectively. Market-wide cargo yields have normalized from peak levels over the past two years, but network synergies and disciplined capacity deployment can support stable contribution margins. For this quarter, cargo revenue may not be the primary driver of top-line upside versus consensus; instead, its role in sustaining load factors and covering marginal costs on long-haul flights will be the focus.

If the international passenger segment tracks ahead of plan, cargo can provide incremental profitability by leveraging available belly space, especially on trunk lanes where schedule density is higher. Conversely, if passenger yields face pressure, steady cargo contribution provides a hedge to preserve consolidated margins. In the context of the 13.74% revenue growth forecast, a stable cargo outcome would be sufficient to meet expectations so long as passenger revenue delivers as anticipated.

Profitability Bridge and What to Watch on the Call

An implied EBIT margin of around 13.29% this quarter versus 16.94% last quarter aligns with seasonality and a higher operating expense base tied to capacity expansion. The bridge from revenue to EPS will hinge on three items: fuel expense variance versus hedged assumptions, FX translation effects, and non-fuel unit cost discipline. If fuel trends benignly and FX headwinds are contained, the EPS estimate of 1.195 becomes credible, especially given the prior acceleration in net profit on a sequential basis.

Investors should watch commentary on Brazil domestic demand and fare trends, given recent double-digit growth in capacity and traffic. Signals on premium cabin demand and corporate travel recovery in key international corridors matter for yield sustainability. Finally, any updates on fleet induction schedules, maintenance burden, and financing terms will inform the medium-term cost base and capital intensity, which in turn shape forward margin profiles and cash generation.

Governance and Execution

Changes at the board level, including a new chairman appointment in April, draw attention to governance continuity and strategic follow-through. While such changes are not expected to alter the near-term operating plan, they can influence investors’ confidence in execution on network, cost, and balance sheet priorities. Execution against the current capacity plan, disciplined capital allocation, and adherence to communicated financial targets will remain under scrutiny, particularly as the company navigates fuel and FX variability through the year.

Taken together, the setup for this quarter blends healthy demand signals in passenger markets, a constructive—though not exuberant—cargo backdrop, and manageable cost risks underpinned by hedging and cost control initiatives. Meeting or beating the 4.00 billion US dollars revenue and 1.195 EPS estimates will likely require steady yields, sustained high load factors, and limited adverse variance from fuel and FX.

Analyst Opinions

The balance of recent institutional commentary is bullish, with a 100% positive skew in the collected sample over the past quarter. Citigroup upgraded the stock to Buy in mid-March, highlighting improved earnings visibility and raising its target price in tandem. Morgan Stanley followed later in March with an Overweight, emphasizing manageable leverage, partial fuel hedging, and what it sees as an attractive valuation even under conservative cyclical earnings assumptions; its note also argued that airlines can pass higher fuel costs to fares over time, with emerging data already pointing to rising ticket prices.

Two favorable opinions versus zero negative in our filtered window place the current tilt squarely on the bullish side. The underlying rationales converge on three themes directly relevant to the upcoming print. First, demand resilience and load-factor strength are expected to support revenue, consistent with the 13.74% year-over-year growth implied by consensus. Second, margin defense is seen as credible because of hedging and cost control, even if spot fuel prices remain volatile; this underpins confidence in the 0.53 billion US dollars EBIT estimate and the implied 13.29% EBIT margin. Third, valuation support is cited in the context of profitability normalization, with upsides if yields surprise positively on international networks.

From an analytical standpoint, the bullish case rests on operational confirmation. If unit revenue trends in April align with March’s double-digit traffic growth and the company reports stable or improving load factors, revenue can track at or slightly above the 4.00 billion US dollars consensus. On the cost side, disclosure around the fraction of the fuel book hedged and realized fuel prices will be scrutinized to validate the EBIT estimate; even small beats here can meaningfully leverage into the EPS line, given the sensitivity of earnings to fuel and FX. Lastly, any guidance that signals sustained capacity growth with disciplined yields into the next quarter would likely reinforce the positive stance from buy-side and sell-side institutions.

In sum, the majority institutional view anticipates a constructive quarter characterized by healthy passenger momentum, disciplined cost execution, and manageable macro headwinds. Confirmation of these elements—especially passenger yield stability, strong load factors, and controlled non-fuel unit costs—would support the consensus path for revenue and EPS and could catalyze further upside in estimates if delivered alongside incremental clarity on fuel and FX exposure for the remainder of the year.