JetBlue (JBLU) Down 2.5% Since Last Earnings Report: Can It Recover?

It’s been a month since JetBlue Airways (JBLU) last reported earnings. Shares have lost about 2.5% in that time, 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 the most recent earnings report in order to get a better handle on the key drivers.

JetBlue’s narrower-than-expected fourth-quarter loss

JetBlue Airlines‘ First-quarter 2024 loss (excluding one-time items of $1.68) of 43 cents per share was narrower than the Zacks Consensus Estimate of a loss of 53 cents. In the year-ago quarter, JBLU reported a loss of 34 cents.

Operating revenues of $2.21 billion surpassed the Zacks Consensus Estimate of $2.2 billion. However, net profit decreased by 5.11% year-on-year.

Passenger revenue, accounting for the bulk of revenue (93.03%), fell to $2.06 billion from $2.18 billion a year ago. Passenger incomes have been hit by air traffic control problems in the northeast of the country. This figure was just above our forecast of $2.02 billion. Other revenue increased 5.5% to $154 million, above our estimate of $151.7 million.

Other first quarter details

All comparisons are presented year-over-year unless otherwise noted.

Revenue per passenger mile (RASM: a key unit revenue measure) fell 2.5% to 13.54 cents. Passenger revenue per passenger mile decreased 3.2% to 12.60 cents. JetBlue’s average ticket price rose 0.1% to $214.39. Profitability per passenger mile decreased by 3.1%.

Consolidated traffic (measured in revenue passenger miles) declined 2.8%. Capacity (measured in available passenger miles) decreased by 2.7%. Consolidated load factor (percentage of seats occupied by passengers) decreased 10 basis points to 79.7% as the decline in traffic outweighed the reduction in capacity. The actual load factor was lower than our forecast of 81.6%.

Total operating expenses (reported) increased 14% to $2.93 billion, primarily due to an 11% increase in compensation and benefits expenses. The average fuel price per gallon (including related taxes) was $2.97, down 17.3% year-over-year. JBLU’s operating costs per available passenger mile (CASM) increased 17.1% year over year. Excluding fuel, the CASM price rose 7.1% to 10.57 cents.

JetBlue, currently carrying a Zacks Rank #3 (Hold), ended the quarter with cash and cash equivalents of $1.24 billion, up from $1.16 billion at the end of 2023. Total debt at the end of the March quarter was $5.01 billion compared to $4.72 billion in 2023.

The story continues

Grim prospects

In providing guidance for the second quarter of 2024, management stated that all comparisons were made to second quarter 2023 data.

Performance is expected to decline in the range of 2-5%. CASM, excluding fuel and specialty items, is expected to grow 5.5-7.5%. Capital expenditure is expected to be approximately $550 million. Total revenues are expected to decline by 6.5-10.5%. The average fuel cost per gallon is estimated at $2.98-$3.13.

For the full year 2024, productivity is projected to decline into the low-single digits (percentage) relative to actual values ​​in 2023. CASM, excluding fuel and specialty items, is projected to increase in the mid- to high-single digits (percentage) ) compared to data for 2023.

Total revenues in 2024 are expected to decline by single digits compared to 2023 levels (the previous forecast was for 2024 revenues to be flat compared to 2023 levels). The optimistic outlook was driven by JBLU’s increased performance in Latin American markets. Capital spending for the current year is expected to be approximately $1.6 billion.

How have estimates changed since then?

Investors have witnessed a downward trend in estimate revisions over the past month.

As a result of these changes, the consensus estimate moved by -1368.57%.

VGM results

At this point, JetBlue has an average growth score of C, although it lags in the Momentum Score with an F. However, the stock is rated a B on the value side, placing it in the top 40% for this investment strategy.

Overall, the stock has a Total VGM Score of C. If you’re not focused on one strategy, this score should interest you.

Perspectives

Estimates for this company are generally on a downward trend, and the magnitude of these revisions indicates a downward shift. Notably, JetBlue carries a Zacks Rank #3 (Hold). We expect a linear rate of return on the stock over the next few months.

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