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Why Is JetBlue (JBLU) Down 8.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for JetBlue Airways (JBLU - Free Report) . Shares have lost about 8.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is JetBlue due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
JetBlue Posts Loss in Q1
JetBlue incurred a first-quarter 2021 loss (excluding 1 cent from non-recurring items) of 80 cents per share, comparing favorably with the Zacks Consensus Estimate of a loss of 85 cents. Quarterly loss per share was also narrower than the year-ago loss of $1.48. Operating revenues of $1,736 million skyrocketed more than 100% year over year and fell short of the Zacks Consensus Estimate of $1,741.6 million. This massive year-over-year jump reflects improving air-travel demand. Quarterly revenues decreased 5.3% sequentially, mainly due to the Omicron crisis in the early part of the quarter. Moreover, quarterly revenues declined 7.2% from the first-quarter 2019 actuals.
Passenger revenues, accounting for the bulk of the top line (92.3%), increased to $1,603 million in first-quarter 2022 from a mere $670 million a year ago when the impact of coronavirus on air-travel demand was much severe. Other revenues surged in excess of 100% to $133 million.
All comparisons are presented on a year-over-year basis. Revenue per available seat mile (RASM: a key measure of unit revenues) in the reported quarter improved 40% to 11.29 cents. Passenger revenue per available seat mile (PRASM) surged 41.5% to 10.42 cents owing to better air-travel demand. Average fare at JetBlue during the quarter increased 30.7% to $195.99. Yield per passenger mile shot up 27.3% year over year to 14.67 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) skyrocketed 88.1% in the reported quarter. To cater to this increased demand, capacity (measured in available seat miles) expanded 69.2% to 15,383 million. Consolidated load factor (percentage of seats filled by passengers) increased 7.1 percentage points to 71% in the first quarter of 2022 as traffic growth outpaced capacity expansion.
In the first quarter, total operating expenses (on a reported basis) escalated 104.8% to $2,103 million, mainly due to a 195% rise in aircraft fuel expenses and related taxes. Average fuel price per gallon (including related taxes) climbed to $2.90 from $1.72 a year ago as oil prices move north. JetBlue’s operating expenses per available seat mile (CASM) increased 21% to 13.67 cents. Excluding fuel, the metric declined 19.4% to 9.87 cents.
JetBlue exited the first quarter of 2022 with cash and cash equivalents of $1,834 million compared with $2,018 million at the end of 2021. Total debt at the end of the reported quarter was $3,926 million compared with $4,006 million at 2021 end. During the quarter, JBLU paid off regularly scheduled debt and finance lease obligations worth $83 million.
Outlook
While providing guidance for second-quarter 2022, management stated that all comparisons are made with respect to the second quarter of 2019. Capacity is anticipated to be flat or increase up to 3% from second-quarter 2019 actuals. CASM excluding fuel and special items is predicted to rise 15-17%.
Total revenues are forecast to increase in the 11-16% range. The revenue projection includes up to a four-point impact from the operational disruption in April. Average fuel cost per gallon in the June quarter is estimated to be $3.79. Capital expenditures in the June quarter are anticipated to be roughly $300 million.
For 2022, capacity is expected to be flat or increase up to 5% from the 2019 levels. CASM, excluding fuel and special items, is predicted to rise 10-15% from the 2019 actuals. Capital expenditures for 2022 are anticipated to be roughly $1 billion. Current-year interest expenses are forecast in the $140-$150 million band.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 62.5% due to these changes.
VGM Scores
Currently, JetBlue has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, JetBlue has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is JetBlue (JBLU) Down 8.6% Since Last Earnings Report?
A month has gone by since the last earnings report for JetBlue Airways (JBLU - Free Report) . Shares have lost about 8.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is JetBlue due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
JetBlue Posts Loss in Q1
JetBlue incurred a first-quarter 2021 loss (excluding 1 cent from non-recurring items) of 80 cents per share, comparing favorably with the Zacks Consensus Estimate of a loss of 85 cents. Quarterly loss per share was also narrower than the year-ago loss of $1.48. Operating revenues of $1,736 million skyrocketed more than 100% year over year and fell short of the Zacks Consensus Estimate of $1,741.6 million. This massive year-over-year jump reflects improving air-travel demand. Quarterly revenues decreased 5.3% sequentially, mainly due to the Omicron crisis in the early part of the quarter. Moreover, quarterly revenues declined 7.2% from the first-quarter 2019 actuals.
Passenger revenues, accounting for the bulk of the top line (92.3%), increased to $1,603 million in first-quarter 2022 from a mere $670 million a year ago when the impact of coronavirus on air-travel demand was much severe. Other revenues surged in excess of 100% to $133 million.
All comparisons are presented on a year-over-year basis. Revenue per available seat mile (RASM: a key measure of unit revenues) in the reported quarter improved 40% to 11.29 cents. Passenger revenue per available seat mile (PRASM) surged 41.5% to 10.42 cents owing to better air-travel demand. Average fare at JetBlue during the quarter increased 30.7% to $195.99. Yield per passenger mile shot up 27.3% year over year to 14.67 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) skyrocketed 88.1% in the reported quarter. To cater to this increased demand, capacity (measured in available seat miles) expanded 69.2% to 15,383 million. Consolidated load factor (percentage of seats filled by passengers) increased 7.1 percentage points to 71% in the first quarter of 2022 as traffic growth outpaced capacity expansion.
In the first quarter, total operating expenses (on a reported basis) escalated 104.8% to $2,103 million, mainly due to a 195% rise in aircraft fuel expenses and related taxes. Average fuel price per gallon (including related taxes) climbed to $2.90 from $1.72 a year ago as oil prices move north. JetBlue’s operating expenses per available seat mile (CASM) increased 21% to 13.67 cents. Excluding fuel, the metric declined 19.4% to 9.87 cents.
JetBlue exited the first quarter of 2022 with cash and cash equivalents of $1,834 million compared with $2,018 million at the end of 2021. Total debt at the end of the reported quarter was $3,926 million compared with $4,006 million at 2021 end. During the quarter, JBLU paid off regularly scheduled debt and finance lease obligations worth $83 million.
Outlook
While providing guidance for second-quarter 2022, management stated that all comparisons are made with respect to the second quarter of 2019. Capacity is anticipated to be flat or increase up to 3% from second-quarter 2019 actuals. CASM excluding fuel and special items is predicted to rise 15-17%.
Total revenues are forecast to increase in the 11-16% range. The revenue projection includes up to a four-point impact from the operational disruption in April. Average fuel cost per gallon in the June quarter is estimated to be $3.79. Capital expenditures in the June quarter are anticipated to be roughly $300 million.
For 2022, capacity is expected to be flat or increase up to 5% from the 2019 levels. CASM, excluding fuel and special items, is predicted to rise 10-15% from the 2019 actuals. Capital expenditures for 2022 are anticipated to be roughly $1 billion. Current-year interest expenses are forecast in the $140-$150 million band.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 62.5% due to these changes.
VGM Scores
Currently, JetBlue has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, JetBlue has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.