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JetBlue's (JBLU) Q3 Loss Wider Than Expected, Q4 View Weak
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JetBlue Airways (JBLU - Free Report) third-quarter 2023 loss (excluding 7 cents from non-recurring items) of 39 cents per share was wider than the Zacks Consensus Estimate of a loss of 27 cents. In the year-ago quarter, JBLU had reported earnings of 21 cents. Headwinds like weather-related constraints and high fuel prices hurt results.
Operating revenues of $2,353 million missed the Zacks Consensus Estimate of $2,379 million. Moreover, the top line decreased 8.16% year over year.
Passenger revenues, accounting for the bulk of the top line (93.5%), declined to $2,201 million from $2,415 million a year ago. Passenger revenues were hurt due to air traffic control issues in the Northeast. The metric fell short of our projection of $2,250.3 million. Other revenues rose 3.1% to $152 million.
Other Q3 Details
All comparisons are presented on a year-over-year basis, unless mentioned otherwise.
Revenue per available seat mile (RASM: a key measure of unit revenues) declined 14.2% to 13.55 cents. Passenger revenue per available seat mile plunged 14.9% to 12.68 cents. Average fare at JetBlue decreased 12.3% to $201.73. Yield per passenger mile dipped 13.9% to 14.89 cents, which fell short of our estimate of 15.76 cents.
Consolidated traffic (measured in revenue passenger miles) improved 5.8%. To cater to this increased demand, capacity (measured in available seat miles) rose 7.1% to 17,362 million. Consolidated load factor (percentage of seats filled by passengers) contracted 100 basis points to 85.1% as traffic growth was outpaced by capacity expansion. The actual value outperformed our projection of 83.4%.
Total operating costs (on a reported basis) increased 3.5% to $2,509 million, mainly due to a 17% gain in expenses on salaries, wages and benefits. Average fuel price per gallon (including related taxes) was $2.94, up 11.8% sequentially, highlighting a rise in oil price. JBLU’s operating expenses per available seat mile (CASM) fell 3.3% year over year. Excluding fuel, CASM improved 5.9% to 10.27 cents.
JetBlue, currently carrying a Zacks Rank #3 (Hold), exited the quarter with cash and cash equivalents of $973 million compared with $1,042 million at the end of 2022. Total debt at the end of the September quarter was $4,001 million compared with $3,647 million at 2022 end. So far this year, JBLU has paid off $254 million of debt and finance lease obligations. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bleak Outlook
While providing guidance for fourth-quarter 2023, management stated that all comparisons are made with respect to fourth-quarter 2022 figures.
Capacity is anticipated to jump in the 0.5-3.5% band. CASM, excluding fuel and special items, is predicted to climb 8.5-10.5%. Capital expenditures are expected to be roughly $400 million.
Total revenues are forecast to tumble in the range of 6.5-10.5%. Average fuel cost per gallon is estimated to be between $3.05 and $3.20. Interest expense is predicted in the $60-$70 million band.
Management expects loss per share in the band of 35-55 cents. The Zacks Consensus Estimate is currently pegged at a loss of 27 cents.
For full-year 2023, capacity is envisioned to grow in the band of 5-7% from 2022 actuals. CASM, excluding fuel and special items, is predicted to rise 4.5-5.5% from 2022 figures. Current-year interest expense is forecast in the $205-$215 million band.
Total revenues for 2023 are anticipated to register year-over-year increase of 3-5%. Capital expenditures are expected to be roughly $1.2 billion in the current year. Share count for the current year is suggested to be 333 million.
Management now projects to incur a loss per share in the range of 45-65 cents (earlier guidance was for earnings in the 5-40 cents band) in 2023. The Zacks Consensus Estimate is currently pegged at a loss of 26 cents.
A Sneak Peek Into Other Notable Airlines’ Results
United Airlines (UAL - Free Report) reported third-quarter 2023 earnings per share (excluding 23 cents from non-recurring items) of $3.65, which outpaced the Zacks Consensus Estimate of $3.40 and improved 29.9% year over year.
Operating revenues of $14,484 million beat the Zacks Consensus Estimate of $14,441.8 million. The top line increased 12.5% year over year due to upbeat air-travel demand. This was driven by a 14.6% rise in passenger revenues (accounting for 92.5% of the top line) to $13,349 million.
American Airlines (AAL - Free Report) third-quarter 2023 earnings (excluding $1.21 from non-recurring items) of 38 cents per share easily beat the Zacks Consensus Estimate of 26 cents. Operating revenues of $13,482 million increased marginally year over year. The top line missed the Zacks Consensus Estimate of $13,518.7 million. Passenger revenues, accounting for 92.1% of the top line, climbed to $12,421 million from $12,396 million a year ago.
Total operating costs (on a reported basis) increased 9.4% year over year to $13,705 million, with expenses on salaries, wages and benefits rising to $3,974 million from $3,384 million in the previous year. Average fuel price per gallon (including related taxes) tumbled to $2.91 from $3.73 in the prior year. Consolidated operating costs per available seat mile (excluding fuel and special items) expanded 3.3% to 13.02 cents.
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JetBlue's (JBLU) Q3 Loss Wider Than Expected, Q4 View Weak
JetBlue Airways (JBLU - Free Report) third-quarter 2023 loss (excluding 7 cents from non-recurring items) of 39 cents per share was wider than the Zacks Consensus Estimate of a loss of 27 cents. In the year-ago quarter, JBLU had reported earnings of 21 cents. Headwinds like weather-related constraints and high fuel prices hurt results.
Operating revenues of $2,353 million missed the Zacks Consensus Estimate of $2,379 million. Moreover, the top line decreased 8.16% year over year.
Passenger revenues, accounting for the bulk of the top line (93.5%), declined to $2,201 million from $2,415 million a year ago. Passenger revenues were hurt due to air traffic control issues in the Northeast. The metric fell short of our projection of $2,250.3 million. Other revenues rose 3.1% to $152 million.
Other Q3 Details
All comparisons are presented on a year-over-year basis, unless mentioned otherwise.
Revenue per available seat mile (RASM: a key measure of unit revenues) declined 14.2% to 13.55 cents. Passenger revenue per available seat mile plunged 14.9% to 12.68 cents. Average fare at JetBlue decreased 12.3% to $201.73. Yield per passenger mile dipped 13.9% to 14.89 cents, which fell short of our estimate of 15.76 cents.
Consolidated traffic (measured in revenue passenger miles) improved 5.8%. To cater to this increased demand, capacity (measured in available seat miles) rose 7.1% to 17,362 million. Consolidated load factor (percentage of seats filled by passengers) contracted 100 basis points to 85.1% as traffic growth was outpaced by capacity expansion. The actual value outperformed our projection of 83.4%.
Total operating costs (on a reported basis) increased 3.5% to $2,509 million, mainly due to a 17% gain in expenses on salaries, wages and benefits. Average fuel price per gallon (including related taxes) was $2.94, up 11.8% sequentially, highlighting a rise in oil price. JBLU’s operating expenses per available seat mile (CASM) fell 3.3% year over year. Excluding fuel, CASM improved 5.9% to 10.27 cents.
JetBlue, currently carrying a Zacks Rank #3 (Hold), exited the quarter with cash and cash equivalents of $973 million compared with $1,042 million at the end of 2022. Total debt at the end of the September quarter was $4,001 million compared with $3,647 million at 2022 end. So far this year, JBLU has paid off $254 million of debt and finance lease obligations. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bleak Outlook
While providing guidance for fourth-quarter 2023, management stated that all comparisons are made with respect to fourth-quarter 2022 figures.
Capacity is anticipated to jump in the 0.5-3.5% band. CASM, excluding fuel and special items, is predicted to climb 8.5-10.5%. Capital expenditures are expected to be roughly $400 million.
Total revenues are forecast to tumble in the range of 6.5-10.5%. Average fuel cost per gallon is estimated to be between $3.05 and $3.20. Interest expense is predicted in the $60-$70 million band.
Management expects loss per share in the band of 35-55 cents. The Zacks Consensus Estimate is currently pegged at a loss of 27 cents.
For full-year 2023, capacity is envisioned to grow in the band of 5-7% from 2022 actuals. CASM, excluding fuel and special items, is predicted to rise 4.5-5.5% from 2022 figures. Current-year interest expense is forecast in the $205-$215 million band.
Total revenues for 2023 are anticipated to register year-over-year increase of 3-5%. Capital expenditures are expected to be roughly $1.2 billion in the current year. Share count for the current year is suggested to be 333 million.
Management now projects to incur a loss per share in the range of 45-65 cents (earlier guidance was for earnings in the 5-40 cents band) in 2023. The Zacks Consensus Estimate is currently pegged at a loss of 26 cents.
A Sneak Peek Into Other Notable Airlines’ Results
United Airlines (UAL - Free Report) reported third-quarter 2023 earnings per share (excluding 23 cents from non-recurring items) of $3.65, which outpaced the Zacks Consensus Estimate of $3.40 and improved 29.9% year over year.
Operating revenues of $14,484 million beat the Zacks Consensus Estimate of $14,441.8 million. The top line increased 12.5% year over year due to upbeat air-travel demand. This was driven by a 14.6% rise in passenger revenues (accounting for 92.5% of the top line) to $13,349 million.
American Airlines (AAL - Free Report) third-quarter 2023 earnings (excluding $1.21 from non-recurring items) of 38 cents per share easily beat the Zacks Consensus Estimate of 26 cents. Operating revenues of $13,482 million increased marginally year over year. The top line missed the Zacks Consensus Estimate of $13,518.7 million. Passenger revenues, accounting for 92.1% of the top line, climbed to $12,421 million from $12,396 million a year ago.
Total operating costs (on a reported basis) increased 9.4% year over year to $13,705 million, with expenses on salaries, wages and benefits rising to $3,974 million from $3,384 million in the previous year. Average fuel price per gallon (including related taxes) tumbled to $2.91 from $3.73 in the prior year. Consolidated operating costs per available seat mile (excluding fuel and special items) expanded 3.3% to 13.02 cents.