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JetBlue's (JBLU) Q3 Earnings Surpass Estimates, Increase Y/Y

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JetBlue Airways’ (JBLU - Free Report) third-quarter 2019 earnings per share (excluding 4 cents from non-recurring items) came in at 59 cents per share, which outpaced the Zacks Consensus Estimate of 53 cents. Moreover, quarterly earnings surged 37.2% on a year-over-year basis, mainly due to low fuel costs.

Operating revenues totaled $2,086 million, in line with the Zacks Consensus Estimate.Moreover, it compared favorably with the year-ago number. Passenger revenues, which accounted for bulk of the top line (96.1%), improved 3.3% year over year in the quarter under review. Other revenues were also up 21.6%.

Additionally, revenue per available seat mile (RASM: a key measure of unit revenues) in the reported quarter dipped 0.9% to 12.8 cents. Passenger revenue per available seat mile (PRASM) slid 1.4% to 12.3 cents. Average fare at JetBlue during the quarter inched up 3.2% to $181.26. Yield per passenger mile slipped 0.9% year over year to 14.39 cents.

Capacity, measured in available seat miles, expanded 4.8% year over year. Meanwhile, traffic, measured in revenue passenger miles, grew 4.2% in the reported quarter. Consolidated load factor (percentage of seats filled by passengers) contracted 40 basis points year over year to 85.5% as traffic growth was outpaced by capacity expansion in the September quarter.

In the third quarter, total operating expenses (on a reported basis) declined 4.7% year over year despite higher costs pertaining to salaries, wages and benefits. Average fuel cost per gallon (including fuel taxes) decreased 11% year over year to $2.06. JetBlue’s operating expenses per available seat mile (CASM) declined 9.1% to 11.29 cents. Excluding fuel, the metric increased 0.3% to 8.33 cents.

JetBlue, carrying a Zacks Rank #3 (Hold), exited the quarter with cash and cash equivalents of $695 million compared with $474 million at the end of 2018. Total debt at the end of the third quarter was $1,636 million compared with $1, 670 million at 2018 end.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

JetBlue Airways Corporation Price, Consensus and EPS Surprise

 

JetBlue Airways Corporation Price, Consensus and EPS Surprise

JetBlue Airways Corporation price-consensus-eps-surprise-chart | JetBlue Airways Corporation Quote


Outlook

For the fourth quarter of 2019, JetBlue expects RASM between 0.5% and 3.5%, indicating a decline from the year-ago reported figure. For the same time frame, the carrier anticipates capacity to increase between 4.5% and 6.5%. The metric is now projected to improve in the 6-7% range for 2019 (earlier guidance hinted at capacity expansion in the 5.5-6.5% band).

Consolidated operating cost per available seat mile excluding fuel is expected to either decline 1% or increase up to 1% in the fourth quarter. For the current year, the metric is still predicted to increase between 0.5% and 1.5%. The company reaffirms effective tax rate of around 26% for the full year.

Fourth-quarter fuel cost, net of hedges, is estimated to be $2.07 per gallon. The company is well on track to achieve its 2020 EPS target, which is in the $2.5-$3 range. The Zacks Consensus Estimate for 2020 earnings is currently pegged at $2.34.

Total capital expenditures for the fourth quarter are expected between $490 million and $610 million. While the metric is forecast in the range of $1,150-$1,300 million for the ongoing year.

Upcoming Releases

Investors interested in the Zacks Airline industry are keenly awaiting third-quarter 2019 earnings reports from key players like Southwest Airlines (LUV - Free Report) , Alaska Air Group (ALK - Free Report) and American Airlines (AAL - Free Report) , all three scheduled to report on Oct 24.

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