JetBlue Airways (JBLU) Down on Bearish Q1 RASM View
Shares of Long Island City, NY-based carrier, JetBlue Airways Corporation JBLU lost considerably following its announcement of a revised RASMguidance forfirst-quarter 2017. Shares of this low-cost carrier were down 1.58% from the previous day’s closing to $20.21 on Apr 12. The guidance was issued by the company along with its March traffic results.
Traffic – measured in revenue passenger miles (RPMs) – was 4.1 billion, up 2.9% from 3.9 billion reported a year ago. On a year-over-year basis, consolidated capacity or available seat miles (ASMs) grew 4.2% to 4.7 billion. Additionally, load factor or percentage of seats filled by passengers declined to 85.7% from 86.8% in Mar 2016 as capacity expansion outpaced traffic growth. JetBlue’s preliminary revenue per available seat mile (RASM) in the month decreased 6.5% year over year. Excluding the estimated impact of 7 points due to the timing of Easter, the Metric increased 0.5% in March.
For the first three months of 2017, JetBlue reported a 3.9% rise in RPMs to 11.4 billion and 4.2% increase in ASMs of 13.6 billion, both on a year-over-year basis. Meanwhile, the load factor declined 30 basis points to 83.9%. The number of departures grew 5.9% and 5.5% for the reported month and for the first three months, respectively.
Q1 Guidance
JetBlue tweaked its guidance for first-quarter unit revenue 2017 (detailed results will be out on Apr 25). RASM is now expected to decline on a year over year basis around 4.8% (old guidance had called for a decline in the band of 4% to 5%). The company however expects April RASM, adjusted for Easter, to increase more than that in March.
Price Performance
Shares of JetBlue lost 2.57% over the last three months, underperforming the Zacks categorized Transportation-Airline industry’s gain of 3.34%.
The bearish RASM guidance is another unfavorable development for the stock.
Zacks Rank & Key Picks
JetBlue currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the broader transportation sector are Gol Linhas Aereas Inteligentes GOL, Aegean Marine Petroleum Network ANW and Deutsche Lufthansa DLAKY. Gol Linhas and Aegean Marine Petroleum sport a Zacks Rank #1 (Strong Buy), while Deutsche Lufthansa carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Gol Linhas, Aegean Marine Petroleum and Deutsche Lufthansa gained over 131%, 19% and 27% respectively, on a year-to-date basis.
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JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
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