It has been about a month since the last earnings report for JetBlue Airways (JBLU Quick QuoteJBLU - Free Report) . Shares have added about 20.9% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Narrower-Than-Expected Q4 Loss at JetBlue

JBLU's fourth-quarter 2023 loss (excluding 12 cents from non-recurring items) of 19 cents per share was narrower than the Zacks Consensus Estimate of a loss of 28 cents. In the year-ago quarter, JBLU reported earnings of 22 cents.

Operating revenues of $2.32 billion edged past the Zacks Consensus Estimate of $2.29 billion. However, the top line decreased 3.73% year over year.

Passenger revenues, accounting for the bulk of the top line (93.2%), declined to $2.17 billion from $2.27 billion a year ago. Passenger revenues were hurt due to air-traffic-control issues in the Northeast.  The metric was just ahead of our projection of $2.13 billion. Other revenues rose 7.7% to $159 million, just short of our estimate of $159.9 million.

Revenue per available seat mile (RASM: a key measure of unit revenues) declined 6.8% to 13.67 cents. Passenger revenue per available seat mile fell 7.5% to 12.73 cents. Average fare at JetBlue decreased 12.3% to $201.73. Yield per passenger mile dipped 2%.

Consolidated traffic (measured in revenue passenger miles) declined 0.5%. Capacity (measured in available seat miles) increased 3.3%. Consolidated load factor (percentage of seats filled by passengers) contracted 310 basis points to 80.1% as traffic decreased while capacity improved. The actual value of the load factor was a tad less than our projection of 80.2%.

Total operating costs (on a reported basis) edged up 0.9% to $2.39 billion, mainly due to a 9% gain in expenses on salaries, wages and benefits. The average fuel price per gallon (including related taxes) was $3.08, up 4.8% sequentially, highlighting a rise in oil price. JBLU’s operating expenses per available seat mile (CASM) fell 2.4% year over year. Excluding fuel, CASM increased 7.6% to 9.82 cents.

JetBlue exited the quarter with cash and cash equivalents of $1.16 billion compared with $1.04 billion at the end of 2022. Total debt at the end of the December quarter was $4.72 billion compared with $3.65 billion at 2022-end. In line with its cost-cutting efforts, JBLU reached agreements to defer $2.5 billion in planned aircraft spending to 2028 and later from original plans of incurring these expenses in the 2024-2027 time frame.

Bleak Outlook

While providing guidance for first-quarter 2024, management stated that all comparisons are made with respect to first-quarter 2023 figures.

Capacity is anticipated to decline in the 3-6% band. CASM, excluding fuel and special items, is predicted to climb 9-11%. Capital expenditures are expected to be roughly $250 million.  Total revenues are forecast to tumble in the range of 5-9%. Average fuel cost per gallon is estimated to be between $2.87 and $3.02.

For full-year 2024, capacity is envisioned to be down in low single digits (percentage wise) from 2023 actuals. CASM, excluding fuel and special items, is predicted in the mid-to-high single-digit range (percentage-wise) from 2023 figures.

Total revenues for 2024 are anticipated to be flat from 2023 levels. Capital expenditures are expected to be roughly $1.6 billion in the current year. Management expects current-year earnings to approach breakeven.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -71.48% due to these changes.

VGM Scores

At this time, JetBlue has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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. Notably, JetBlue has a Zacks Rank #3 (Hold). We expect an in-line 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, Southwest Airlines (LUV Quick QuoteLUV - Free Report) , a stock from the same industry, has gained 15.3%. The company reported its results for the quarter ended December 2023 more than a month ago.

Southwest reported revenues of $6.82 billion in the last reported quarter, representing a year-over-year change of +10.5%. EPS of $0.37 for the same period compares with -$0.38 a year ago.

For the current quarter, Southwest is expected to post a loss of $0.05 per share, indicating a change of +81.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +63.4% over the last 30 days.

Southwest has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.