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JetBlue (JBLU) Lifts Q3 Traffic View on Demand Strength

·3 min read

JetBlue Airways’ JBLU management raised its previous view for third-quarter 2022 air traffic as it continues to see strong air-travel demand even after the peak of summer has passed. Revenue per available seat mile (RPMs: a measure of air traffic) for the September quarter is expected to increase in the 22-24% band from the third-quarter 2019 actuals (earlier guidance: increase in the 19-23% range).

Owing to a strong completion factor (% of scheduled flights that are completed) and improved reliability, JBLU’s capacity guidance for the September quarter is better than the earlier expectation. JetBlue now expects available seat miles (a measure of capacity) to vary from (0.5%) to 0.5% (earlier guidance: flat with or decrease up to 3% from third-quarter 2019 actuals).

Cost per available seat miles, excluding fuel and special items, is still expected to increase in the 15-17% range from third-quarter 2019 actuals. The guidance for fuel cost per gallon was increased 18 cents to $3.86 as oil price moves north. The increase in the projection for fuel cost per gallon is likely to dent the bottom-line performance of JetBlue, currently carrying a Zacks Rank #3 (Hold), in the third quarter of 2022.

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

The buoyant air-travel demand scenario is expected to boost the top-line performance of not only JetBlue but other carriers as well in the September quarter. Earlier this month, United Airlines UAL lifted its third-quarter revenue view on increased passenger volume. More and more people are again taking to the skies as coronavirus-related restrictions ease. Even though business travel is lagging the pre-coronavirus levels (despite improving from the pandemic-induced lows), leisure travel is very strong.

United Airlines now anticipates total operating revenues to grow almost 12% from the September-quarter level of 2019. The estimate is higher than the prior expected growth rate of about 11%. UAL is seeing a steady recovery in domestic and leisure air-travel demand. Recovery in business travel demand also picked up the pace. Against this rosy backdrop, UAL expects to be profitable in the third quarter alike the second quarter of 2022.

Stocks to Consider

Some better-ranked stocks in the Zacks Transportation sector are Triton International TRTN and C.H. Robinson CHRW.

Triton is being aided by the gradual increase in trade volumes and container demand. TRTN expects container demand to remain strong throughout 2022. Measures to reward its shareholders through dividends and buybacks instill confidence in the stock.

Triton has an expected earnings growth rate of 22.4% for the current year. TRTN’s bottom line outpaced the Zacks Consensus Estimate in each of the last four quarters, the average being 7.5%. TRTN currently carries a Zacks Rank #2 (Buy).

C.H. Robinson is being aided by an improving freight scenario in the United States. Efforts to control costs also bode well. Measures to reward its shareholders instill confidence in the stock.

CHRW has a pleasant earnings track record. The bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters (missing the mark in the remaining one). The average beat is 24.2%. The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 17.3% upward over the past 60 days. C.H. Robinson currently carries a Zacks Rank of 2.


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JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report
 
United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
 
C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
 
Triton International Limited (TRTN) : Free Stock Analysis Report
 
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