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JetBlue Airways Shares Slide After Missing Q2 Street Expectations

  • JetBlue Airways Corp (NASDAQ: JBLU) reported a second-quarter FY22 adjusted loss per share of $(0.47) compared to adjusted EPS of $0.60 in 2Q19, missing the consensus of $(0.11).

  • Operating revenue grew 16.1% compared to 1Q19 and +63.1% year-over-year to $2.45 billion, missing the consensus of $2.46 billion.

  • Capacity increased by 2.3% year over three, compared to guidance of an increase of 2% to 3% year over three.

  • Operating expenses per available seat mile increased 34.7% year over three.

  • Operating expenses per available seat mile, excluding fuel and special items (CASM ex-fuel), increased 14.5% year over three, compared to guidance of 15% to 17%.

  • The adjusted operating margin recovered to -2.8% from -12% in 2Q19.

  • On the recent merger agreement with Spirit Airlines, Inc (NYSE: SAVE), JetBlue expects to achieve $600 million-700 million in net annual synergies once the integration is complete and expects the transaction to be significantly accretive to EPS in the first full year following closing.

  • RelatedSpirit Airlines Locks The Deal With JetBlue, Creating National Low-Fare Challenger

  • “I’m very pleased we found a path forward with Spirit, and we can’t wait to welcome their incredible 10,000 Team Members to JetBlue as we create a true, national low-fare challenger to the dominant ‘Big Four’ airlines. Together we will expand our uniquely disruptive combination of award-winning service and competitive low fares to more customers across the country as we combine the best of both airlines,” said CEO Robin Hayes.

  • The load factor improved to 85.1% from 79.2% a year ago. The realized fuel price in the quarter was $4.24 per gallon, a 97% increase versus the 2Q19.

  • JetBlue expects an average all-in price per gallon of fuel of $3.68 in 3Q22.

  • As of June 30, 2022, JetBlue’s adjusted debt to capital ratio was 54%. It held ~$2.6 billion in cash and equivalents.

  • 3Q22 Outlook: JetBlue expects unit revenue to increase 19% - 23%. It expects CASM ex-Fuel to grow 15% - 17%. Capacity is expected to be flat to negative 3%.

  • FY22 Outlook: JetBlue expects capacity growth between 0% and 3% versus 2019, and CASM ex-Fuel to increase in the range of 11% to 14% versus 2019.

  • Price Action: JBLU shares traded lower by 4.66% at $8.19 during the premarket session on Tuesday.

  • Photo Via Wikimedia Commons

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