In this article, I will take a look at JetBlue Airways Corporation's (NasdaqGS:JBLU) most recent earnings update (30 September 2019) and compare these latest figures against its performance over the past few years, along with how the rest of JBLU's industry performed. As a long-term investor, I find it useful to analyze the company's trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time.
Was JBLU weak performance lately part of a long-term decline?
JBLU's trailing twelve-month earnings (from 30 September 2019) of US$577m has declined by -14% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 0.8%, indicating the rate at which JBLU is growing has slowed down. What could be happening here? Let's examine what's occurring with margins and whether the entire industry is feeling the heat.
In terms of returns from investment, JetBlue Airways has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. Furthermore, its return on assets (ROA) of 5.8% is below the US Airlines industry of 6.6%, indicating JetBlue Airways's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for JetBlue Airways’s debt level, has declined over the past 3 years from 19% to 9.7%.
What does this mean?
JetBlue Airways's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. I recommend you continue to research JetBlue Airways to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for JBLU’s future growth? Take a look at our free research report of analyst consensus for JBLU’s outlook.
- Financial Health: Are JBLU’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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