What happened

Copa Holdings (CPA 2.01%) stock tumbled 5.5% at around 11:30 a.m. EST after the Panamanian discount carrier reported third-quarter earnings that missed estimates for both sales and earnings.

Q3 sales of $672.4 million fell short of Wall Street's forecast of $684.2 million in revenue. Earnings of $1.36 per diluted share likewise missed the Street estimate of $1.42.

Copa crew standing in front of a Copa airplane

Sadly, it's not all smiles among Copa Holdings shareholders today. Image source: Copa Airlines.

So what

It gets worse. Compared to last year, when Copa Holdings earned  $2.48 per diluted share from its business, Copa's earnings declined 45% year over year. This was despite the fact that the company actually grew its sales by a modest 2%.

Copa blamed rising fuel costs and falling exchange rates on revenue earned in Brazilian and Argentinean currency for its steeply declining profits. The average price per gallon of fuel Copa purchased surged 32% year over year. Currency-wise, the Brazilian real has lost about 14% of its value relative to the U.S. dollar over the past year -- while the Argentine peso has devalued by more than 50%.

Now what

Copa did not include new guidance in its earnings press release but analysts are not optimistic. Estimates presently predict that Copa's sales will grow 3% year over year in the year's final quarter, but earnings will fall a further 33% to $1.59 per share.

And remember -- these are the same analysts who were too optimistic about Copa's earnings in Q3.