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JetBlue (JBLU) Up 20.6% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for JetBlue Airways (JBLU - Free Report) . Shares have added about 20.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is JetBlue due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Wider-Than-Expected Q3 Loss at JetBlue
JetBlue's 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 per share. 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 when air-travel demand was not so robust. Other revenues rose 3.1% to $152 million. Passenger revenues were hurt due to air traffic control issues in the Northeast.
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 declined 12.3% to $201.73. Yield per passenger mile plunged 13.9% to 14.89 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) declined 100 basis points to 85.1% as traffic growth was outpaced by capacity expansion.
Total operating expenses (on a reported basis) increased 3.5% to $2,509 million, mainly due to the 17% increase in expenses on salaries, wages and benefits. Average fuel price per gallon (including related taxes) were $2.94, up 11.8% sequentially, highlighting the rise in oil price. JBLU’s operating expenses per available seat mile (CASM) fell 3.3% year over year. Excluding fuel, CASM increased 5.9% to 10.27 cents.
JetBlue 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.
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 increase in the 0.5-3.5% band. CASM, excluding fuel and special items, is predicted to rise 8.5-10.5%. Capital expenditures are likely to be roughly $400 million in the fourth quarter.
Total revenues are forecast to decrease in the range of 6.5-10.5%. Average fuel cost per gallon in the December quarter is estimated to be between $3.05 and $3.20. Interest expense is forecast in the $60-$70 million band.
In fourth-quarter 2023, JBLU expects loss per share in the band of 35-55 cents. For full-year 2023, capacity is expected to grow in the band of 5-7% from the 2022 actuals. CASM, excluding fuel and special items, is predicted to rise 4.5-5.5% from the 2022 actuals. 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 likely to be roughly $1.2 billion in the current year. Share count for the current year is expected to be 333 million. Management now projects to incur a loss in 2023 in the range of 45-65 cents (earlier guidance was for earnings in the 5-40 cents per share range).
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -176.04% due to these changes.
VGM Scores
At this time, JetBlue has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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. It's no surprise JetBlue has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
JetBlue is part of the Zacks Transportation - Airline industry. Over the past month, SkyWest (SKYW - Free Report) , a stock from the same industry, has gained 9.2%. The company reported its results for the quarter ended September 2023 more than a month ago.
SkyWest reported revenues of $766.17 million in the last reported quarter, representing a year-over-year change of -3%. EPS of $0.55 for the same period compares with $0.96 a year ago.
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JetBlue (JBLU) Up 20.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for JetBlue Airways (JBLU - Free Report) . Shares have added about 20.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is JetBlue due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Wider-Than-Expected Q3 Loss at JetBlue
JetBlue's 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 per share. 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 when air-travel demand was not so robust. Other revenues rose 3.1% to $152 million. Passenger revenues were hurt due to air traffic control issues in the Northeast.
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 declined 12.3% to $201.73. Yield per passenger mile plunged 13.9% to 14.89 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) declined 100 basis points to 85.1% as traffic growth was outpaced by capacity expansion.
Total operating expenses (on a reported basis) increased 3.5% to $2,509 million, mainly due to the 17% increase in expenses on salaries, wages and benefits. Average fuel price per gallon (including related taxes) were $2.94, up 11.8% sequentially, highlighting the rise in oil price. JBLU’s operating expenses per available seat mile (CASM) fell 3.3% year over year. Excluding fuel, CASM increased 5.9% to 10.27 cents.
JetBlue 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.
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 increase in the 0.5-3.5% band. CASM, excluding fuel and special items, is predicted to rise 8.5-10.5%. Capital expenditures are likely to be roughly $400 million in the fourth quarter.
Total revenues are forecast to decrease in the range of 6.5-10.5%. Average fuel cost per gallon in the December quarter is estimated to be between $3.05 and $3.20. Interest expense is forecast in the $60-$70 million band.
In fourth-quarter 2023, JBLU expects loss per share in the band of 35-55 cents. For full-year 2023, capacity is expected to grow in the band of 5-7% from the 2022 actuals. CASM, excluding fuel and special items, is predicted to rise 4.5-5.5% from the 2022 actuals. 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 likely to be roughly $1.2 billion in the current year. Share count for the current year is expected to be 333 million. Management now projects to incur a loss in 2023 in the range of 45-65 cents (earlier guidance was for earnings in the 5-40 cents per share range).
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -176.04% due to these changes.
VGM Scores
At this time, JetBlue has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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. It's no surprise JetBlue has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
JetBlue is part of the Zacks Transportation - Airline industry. Over the past month, SkyWest (SKYW - Free Report) , a stock from the same industry, has gained 9.2%. The company reported its results for the quarter ended September 2023 more than a month ago.
SkyWest reported revenues of $766.17 million in the last reported quarter, representing a year-over-year change of -3%. EPS of $0.55 for the same period compares with $0.96 a year ago.