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Why Is JetBlue (JBLU) Down 13.3% 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 13.3% 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 catalysts.
Earnings Beat at JetBlue in Q2
JetBlue Airways’ second-quarter 2023 earnings (excluding 4 cents from non-recurring items) of 45 cents per share beat the Zacks Consensus Estimate of 40 cents. Results were aided by strong air-travel demand. In the year-ago quarter, JBLU incurred a loss of 47 cents per share.
Despite the earnings beat, shares of JBLU tumbled 8.3% on Aug 1, closing the trading session at $7.12 per share. The downside was due to the bearish guidance issued by management for third quarter as well as full-year 2023.
Operating revenues of $2,610 million marginally missed the Zacks Consensus Estimate of $2,610.9 million. However, the top line increased 6.75% year over year on account of improving air-travel demand.
Passenger revenues, accounting for the bulk of the top line (94.25%), climbed to $2,460 million from $2,302 million a year ago when air-travel demand was not so robust. The metric fell short of our projection of $2,527.9 million. Other revenues rose 4.8% to $150 million.
Other Details
All comparisons are presented on a year-over-year basis.
Revenue per available seat mile (RASM: a key measure of unit revenues) improved 9% to 15.04 cents. Passenger revenue per available seat mile inched up 1% to 14.17 cents owing to better air-travel demand.
Average fare at JetBlue inched down 0.9% to $219.47. Yield per passenger mile inched up 0.8% to 16.62 cents, which fell short of our estimate of 17.56 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) improved 5.9%. To cater to this increased demand, capacity (measured in available seat miles) rose 5.8% to 17,353 million. Consolidated load factor (percentage of seats filled by passengers) expanded 20 basis points to 85.3% as traffic growth outpaced capacity expansion. The actual value outperformed our projection of 83.6%.
Total operating expenses (on a reported basis) decreased 7.2% to $2,375 million, mainly due to 34.2% reduction in aircraft fuel expenses and related taxes. Average fuel price per gallon (including related taxes) declined to $2.63 from $4.24 a year ago, as oil prices move south. We expected the metric to be $2.76 per gallon.
JBLU’s operating expenses per available seat mile (CASM) fell 12.2% year over year. Excluding fuel, CASM increased 3.2% to 10 cents.
JetBlue exited the quarter with cash and cash equivalents of $1,462 million compared with $1,042 million at the end of 2022. Total debt at the end of the June quarter was $3,757 million compared with $3,647 million at 2022 end. During the quarter, JBLU paid off $200 million of debt and finance lease obligations.
Outlook
While providing guidance for third-quarter 2023, management stated that all comparisons are made with respect to third-quarter 2022 figures.
Capacity is anticipated to increase in the 5.5-8.5% band. CASM, excluding fuel and special items, is predicted to rise 2.5-5.5%. Capital expenditures are likely to be roughly $400 million in the third quarter.
Total revenues are forecast to decrease in the range of 4-8%. Average fuel cost per gallon in the September quarter is estimated to be between $2.75 and $2.90. Interest expense is forecast in the $45-$55 million band.
In third-quarter 2023, JBLU expects either breakeven earnings or loss up to 20 cents per share. Management now projects 2023 earnings in the range of 5-40 cents per share (earlier guidance: $0.7-$1). For full-year 2023, capacity is expected to grow in the band of 5.5-8.5% from the 2022 actuals. CASM, excluding fuel and special items, is predicted to rise 1.5-4.5% from the 2022 actuals. Current-year interest expense is forecast in the $195-$205 million band. Total revenues for 2023 are anticipated to register year-over-year increase of 6-9%. Capital expenditures are likely to be roughly $1.3 billion in the current year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -126.42% due to these changes.
VGM Scores
At this time, 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 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. 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 13.3% Since Last Earnings Report?
A month has gone by since the last earnings report for JetBlue Airways (JBLU - Free Report) . Shares have lost about 13.3% 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 catalysts.
Earnings Beat at JetBlue in Q2
JetBlue Airways’ second-quarter 2023 earnings (excluding 4 cents from non-recurring items) of 45 cents per share beat the Zacks Consensus Estimate of 40 cents. Results were aided by strong air-travel demand. In the year-ago quarter, JBLU incurred a loss of 47 cents per share.
Despite the earnings beat, shares of JBLU tumbled 8.3% on Aug 1, closing the trading session at $7.12 per share. The downside was due to the bearish guidance issued by management for third quarter as well as full-year 2023.
Operating revenues of $2,610 million marginally missed the Zacks Consensus Estimate of $2,610.9 million. However, the top line increased 6.75% year over year on account of improving air-travel demand.
Passenger revenues, accounting for the bulk of the top line (94.25%), climbed to $2,460 million from $2,302 million a year ago when air-travel demand was not so robust. The metric fell short of our projection of $2,527.9 million. Other revenues rose 4.8% to $150 million.
Other Details
All comparisons are presented on a year-over-year basis.
Revenue per available seat mile (RASM: a key measure of unit revenues) improved 9% to 15.04 cents. Passenger revenue per available seat mile inched up 1% to 14.17 cents owing to better air-travel demand.
Average fare at JetBlue inched down 0.9% to $219.47. Yield per passenger mile inched up 0.8% to 16.62 cents, which fell short of our estimate of 17.56 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) improved 5.9%. To cater to this increased demand, capacity (measured in available seat miles) rose 5.8% to 17,353 million. Consolidated load factor (percentage of seats filled by passengers) expanded 20 basis points to 85.3% as traffic growth outpaced capacity expansion. The actual value outperformed our projection of 83.6%.
Total operating expenses (on a reported basis) decreased 7.2% to $2,375 million, mainly due to 34.2% reduction in aircraft fuel expenses and related taxes. Average fuel price per gallon (including related taxes) declined to $2.63 from $4.24 a year ago, as oil prices move south. We expected the metric to be $2.76 per gallon.
JBLU’s operating expenses per available seat mile (CASM) fell 12.2% year over year. Excluding fuel, CASM increased 3.2% to 10 cents.
JetBlue exited the quarter with cash and cash equivalents of $1,462 million compared with $1,042 million at the end of 2022. Total debt at the end of the June quarter was $3,757 million compared with $3,647 million at 2022 end. During the quarter, JBLU paid off $200 million of debt and finance lease obligations.
Outlook
While providing guidance for third-quarter 2023, management stated that all comparisons are made with respect to third-quarter 2022 figures.
Capacity is anticipated to increase in the 5.5-8.5% band. CASM, excluding fuel and special items, is predicted to rise 2.5-5.5%. Capital expenditures are likely to be roughly $400 million in the third quarter.
Total revenues are forecast to decrease in the range of 4-8%. Average fuel cost per gallon in the September quarter is estimated to be between $2.75 and $2.90. Interest expense is forecast in the $45-$55 million band.
In third-quarter 2023, JBLU expects either breakeven earnings or loss up to 20 cents per share. Management now projects 2023 earnings in the range of 5-40 cents per share (earlier guidance: $0.7-$1). For full-year 2023, capacity is expected to grow in the band of 5.5-8.5% from the 2022 actuals. CASM, excluding fuel and special items, is predicted to rise 1.5-4.5% from the 2022 actuals. Current-year interest expense is forecast in the $195-$205 million band. Total revenues for 2023 are anticipated to register year-over-year increase of 6-9%. Capital expenditures are likely to be roughly $1.3 billion in the current year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -126.42% due to these changes.
VGM Scores
At this time, 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 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, JetBlue has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.