We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will High Fuel Costs Dampen JetBlue's (JBLU) Q2 Earnings?
Read MoreHide Full Article
JetBlue Airways Corporation (JBLU - Free Report) is scheduled to report second-quarter 2018 earnings on Jul 24, before the market opens.
Last reported quarter, the company delivered a positive earnings surprise of 22.7%. The bottom line also climbed 8% year over year on the back of high passenger revenues. Moreover, revenues increased more than 9% but fell short of the Zacks Consensus Estimate.
Let’s see how things are shaping up for this announcement.
Factors at Play
With oil prices rising since the beginning of this year, such costs are most likely to hurt JetBlue’s bottom line in the second quarter, similar to the previous period. The company anticipates fuel cost per gallon between $2.28 and $2.30, much higher than $1.61 reported in the year-ago quarter. The Zacks Consensus Estimate for the same stands at $2.26 per gallon.
Besides fuel costs, costs pertaining to labor could also affect the company’s bottom line. Notably, non-fuel unit costs are expected to increase between 2% and 4% in the second quarter.
JetBlue’s unit revenue performance in the to-be-reported quarter might further mar results. The company estimates revenue per available seat mile (RASM) to slip approximately 1.2% including a 2.5 point adversity from holiday placement and 1.25 point negativity from completion factor and co-brand incentive payments. The Zacks Consensus Estimate for second-quarter RASM stands at 12.76 cents, below 12.93 reported in the prior-year quarter.
However, the negative effects could be slightly offset by the reduced effective tax rate arising from the slashed corporate tax rate. The low effective tax rate is likely to aid bottom-line growth.
Earnings Whispers
Our proven model does not conclusively show that JetBlue is likely to beat estimates this quarter to be reported. This is because a stock needs to have both a positive Earnings ESP and a solid Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as elaborated below.
Zacks ESP: JetBlue has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 36 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: JetBlue carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
JetBlue Airways Corporation Price and EPS Surprise
Investors interested in the broader Transportation sector may consider stocks like United Parcel Service, Inc. (UPS - Free Report) , Expeditors International of Washington, Inc. (EXPD - Free Report) and Norfolk Southern Corporation (NSC - Free Report) as these possess the right combination of elements to deliver an earnings beat this reporting cycle.
UPS has an Earnings ESP of +0.54% and a Zacks Rank of 3. The company will report second-quarter earnings on Jul 25.
Norfolk Southern is also a #2 Ranked stock and has an Earnings ESP of +0.28%. The company will announce second-quarter financial numbers on Jul 25.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Will High Fuel Costs Dampen JetBlue's (JBLU) Q2 Earnings?
JetBlue Airways Corporation (JBLU - Free Report) is scheduled to report second-quarter 2018 earnings on Jul 24, before the market opens.
Last reported quarter, the company delivered a positive earnings surprise of 22.7%. The bottom line also climbed 8% year over year on the back of high passenger revenues. Moreover, revenues increased more than 9% but fell short of the Zacks Consensus Estimate.
Let’s see how things are shaping up for this announcement.
Factors at Play
With oil prices rising since the beginning of this year, such costs are most likely to hurt JetBlue’s bottom line in the second quarter, similar to the previous period. The company anticipates fuel cost per gallon between $2.28 and $2.30, much higher than $1.61 reported in the year-ago quarter. The Zacks Consensus Estimate for the same stands at $2.26 per gallon.
Besides fuel costs, costs pertaining to labor could also affect the company’s bottom line. Notably, non-fuel unit costs are expected to increase between 2% and 4% in the second quarter.
JetBlue’s unit revenue performance in the to-be-reported quarter might further mar results. The company estimates revenue per available seat mile (RASM) to slip approximately 1.2% including a 2.5 point adversity from holiday placement and 1.25 point negativity from completion factor and co-brand incentive payments. The Zacks Consensus Estimate for second-quarter RASM stands at 12.76 cents, below 12.93 reported in the prior-year quarter.
However, the negative effects could be slightly offset by the reduced effective tax rate arising from the slashed corporate tax rate. The low effective tax rate is likely to aid bottom-line growth.
Earnings Whispers
Our proven model does not conclusively show that JetBlue is likely to beat estimates this quarter to be reported. This is because a stock needs to have both a positive Earnings ESP and a solid Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as elaborated below.
Zacks ESP: JetBlue has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 36 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: JetBlue carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
JetBlue Airways Corporation Price and EPS Surprise
JetBlue Airways Corporation Price and EPS Surprise | JetBlue Airways Corporation Quote
Stocks to Consider
Investors interested in the broader Transportation sector may consider stocks like United Parcel Service, Inc. (UPS - Free Report) , Expeditors International of Washington, Inc. (EXPD - Free Report) and Norfolk Southern Corporation (NSC - Free Report) as these possess the right combination of elements to deliver an earnings beat this reporting cycle.
UPS has an Earnings ESP of +0.54% and a Zacks Rank of 3. The company will report second-quarter earnings on Jul 25.
Expeditors has an Earnings ESP of +1.54% and a Zacks Rank #2. The company will report second-quarter earnings on Aug 7. You can see the complete list of today’s Zacks #1 Rank stocks here.
Norfolk Southern is also a #2 Ranked stock and has an Earnings ESP of +0.28%. The company will announce second-quarter financial numbers on Jul 25.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>