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JetBlue (JBLU) Q1 Earnings Surpass Estimates, Increase Y/Y

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JetBlue Airways Corporation’s (JBLU - Free Report) first-quarter 2018 earnings per share of 27 cents surpassed the Zacks Consensus Estimate of 22 cents. The bottom line also increased 8% on a year-over-year basis backed by higher passenger revenues.

However, total operating revenues of $1,754 million fell short of the Zacks Consensus Estimate of $1,757.6 million. Nevertheless, the top line increased more than 9% from the year-ago figure. Passenger revenues, which accounted for bulk of the top line (96.5%), were up 8.7% in the quarter under review. Other revenues increased 39.9%.

Operating Statistics in Q1

Capacity, measured in available seat miles, expanded 3.3% year over year. Traffic — measured in revenue passenger miles — grew 4.1% in the reported quarter. Load factor (percentage of seats filled by passengers) also improved 70 basis points (bps) year over year to 84.6% as traffic growth outpaced capacity expansion in the three-month period.

Yield per passenger mile improved 4.4% year over year to 14.26 cents. While passenger revenue per available seat mile (PRASM: a key measure of unit revenue) increased 5.3% to 12.06 cents, operating revenue per available seat mile (RASM) was up 6.1% to 12.50 cents.

JetBlue Airways Corporation Price, Consensus and EPS Surprise

 

JetBlue Airways Corporation Price, Consensus and EPS Surprise | JetBlue Airways Corporation Quote

Expenses

In the first quarter, total operating expenses (on a reported basis) increased 11.5% year over year mainly owing to high fuel costs. Average fuel cost per gallon (including fuel taxes) escalated 23% to $2.09. Moreover, JetBlue’s operating cost per available seat mile (CASM) was up 8% to 11.59 cents. Excluding fuel, the metric climbed 3.1% to 8.55 cents on account of a rise in labor costs.

Balance Sheet

JetBlue, carrying a Zacks Rank #3 (Hold), exited the quarter with cash and cash equivalents of $511 million compared with $303 million at the end of 2017. Total debt, at the end of the quarter, was $1,143 million than $1,199 million at the end of 2017. We note that this low-cost carrier is constantly working toward reducing its debt levels. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Outlook

For the second quarter of 2018, the carrier expects capacity to increase between 5% and 7%. The metric is still anticipated to increase in the range of 6.5-8.5% for 2018.

Consolidated operating cost per available seat mile, excluding fuel, is expected to grow in the band of 2-4% in the second quarter. For the current year, the metric is still projected in the range of -1% to +1% (year over year).

RASM movement is expected between 0% and -3% in the second quarter on a year-over-year basis. Second-quarter fuel cost, net of hedges, is anticipated to be $2.23 per gallon.

Upcoming Releases

Investors interested in the broader Transportation sector keenly await first-quarter earnings reports from key players like American Airlines Group Inc. (AAL - Free Report) , Southwest Airlines Co. (LUV - Free Report) and Union Pacific Corporation (UNP - Free Report) , All the three companies are scheduled to release respective earnings numbers on Apr 26.

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