LTM Q2 Earnings Beat on Strong Passenger and Cargo Revenues

• Passenger unit revenues climbed 17.5% on higher fares and strong yields despite 8.9% capacity expansion; premium offerings contributed 29% of passenger revenues
• Adjusted EBITDA guidance for 2026 raised to $4.10-$4.40 billion from prior $3.80-$4.20 billion range; revenue outlook increased to $17.30-$17.70 billion
• Operating margin compressed 7.5 percentage points to 5.4% as jet fuel prices climbed 81.3% to $194.50 per barrel; company ended quarter with $4.23 billion total liquidity

LTM Q2 Earnings Summary

Financial Performance

LATAM Airlines Group (LTM) reported second-quarter 2026 earnings of $0.58 per share, beating analyst estimates. Revenues surged 27.6% year-over-year to $4.18 billion, exceeding the consensus estimate of $3.85 billion by 8.6%. Passenger unit revenues climbed 17.5%, reflecting higher fares and strong yields despite an 8.9% capacity expansion.

Revenue Breakdown

Passenger revenues, accounting for 86.4% of operating revenues, grew 27.9% to $3.61 billion. Premium offerings contributed 29% of passenger revenues, up 2 percentage points from Q1. Passenger revenue per available seat kilometer (PRASK) increased to 8.1 cents from 6.9 cents year-over-year.

Cargo revenues rose 21.8% to $510 million (12.2% of total revenues), with cargo yields up 17.8% and traffic improving 3.4%. The company transported 21.1 million passengers, up 2.5% year-over-year.

Cost Pressures

Total adjusted operating expenses jumped 38.5% to $3.96 billion, driven by fuel costs and network expansion. Aircraft fuel expense surged 93.1% to $1.71 billion, with average all-in fuel prices climbing 81.3% to $194.50 per barrel. Adjusted operating margin contracted 7.5 percentage points to 5.4%.

Updated Guidance

LATAM raised its 2026 adjusted EBITDA guidance to $4.10-$4.40 billion from the prior $3.80-$4.20 billion range. Revenue expectations increased to $17.30-$17.70 billion (from $15.5-$16.0 billion). However, adjusted operating margin guidance decreased to 12%-13% (from 15%-17%).

The company maintains strong liquidity of $4.23 billion and holds a Zacks Rank #2 (Buy) rating.