U.S. markets closed
  • S&P 500

    4,662.85
    +3.82 (+0.08%)
     
  • Dow 30

    35,911.81
    -201.79 (-0.56%)
     
  • Nasdaq

    14,893.75
    +86.95 (+0.59%)
     
  • Russell 2000

    2,162.46
    +3.02 (+0.14%)
     
  • Crude Oil

    84.32
    +0.50 (+0.60%)
     
  • Gold

    1,818.90
    +2.40 (+0.13%)
     
  • Silver

    23.05
    +0.13 (+0.58%)
     
  • EUR/USD

    1.1413
    -0.0003 (-0.02%)
     
  • 10-Yr Bond

    1.7720
    +0.0610 (+3.57%)
     
  • GBP/USD

    1.3648
    -0.0032 (-0.23%)
     
  • USD/JPY

    114.5730
    +0.3730 (+0.33%)
     
  • BTC-USD

    42,265.11
    -676.79 (-1.58%)
     
  • CMC Crypto 200

    1,015.49
    -10.24 (-1.00%)
     
  • FTSE 100

    7,611.23
    +68.28 (+0.91%)
     
  • Nikkei 225

    28,333.52
    +209.24 (+0.74%)
     

Why Is JetBlue (JBLU) Up 2.6% Since Last Earnings Report?

  • Oops!
    Something went wrong.
    Please try again later.
·5 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

It has been about a month since the last earnings report for JetBlue Airways (JBLU). Shares have added about 2.6% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is JetBlue due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

JetBlue Posts Loss in Q3

JetBlue incurred a third-quarter 2021 loss (excluding 52 cents from non-recurring items) of 12 cents per share, comparing favorably with the Zacks Consensus Estimate of a loss of 19 cents. Quarterly loss per share was also narrower than the year-ago loss of $1.75.

Operating revenues of $1,972 million skyrocketed 300.8% year over year and also surpassed the Zacks Consensus Estimate of $1,927.9 million. This massive year-over-year jump reflects improving air-travel demand as more and more people take to the skies following widespread vaccination. Revenues increased 31.5% sequentially. However, compared with the third-quarter 2019 actuals, quarterly revenues declined 5.5%.

Passenger revenues, which accounted for the bulk of the top line (94.1%), increased to $1,856 million in third-quarter 2021 from a mere $445 million a year ago when the impact of coronavirus on air-travel demand was much severe. Other revenues surged in excess of 100% to $116 million. Capital expenditures in the reported quarter came in at $263 million

Other Details

All comparisons are presented on a year-over-year basis. Revenue per available seat mile (RASM: a key measure of unit revenues) in the reported quarter improved 71.2% to 12.20 cents. Passenger revenue per available seat mile (PRASM) surged 78.2% to 11.48 cents owing to better air-travel demand. Average fare at JetBlue during the quarter slid 1.1% to $204.50. Yield per passenger mile dropped 4.8% year over year to 14.37 cents.

Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) skyrocketed 338.5% in the reported quarter. To cater to this increased demand, capacity (measured in available seat miles) expanded 134.1% to 16,168 million. Consolidated load factor (percentage of seats filled by passengers) increased 37.3 percentage points to 79.9% in the third quarter of 2021.

In the third quarter, total operating expenses (on a reported basis) escalated 77.1% to $1,786 million, mainly due to a 335.3% rise in aircraft fuel and related taxes. Average fuel price per gallon (including related taxes) climbed to $2.08 from $1.23 a year ago as oil prices move north.

JetBlue’s operating expenses per available seat mile (CASM) fell 24.3% to 11.04 cents. Excluding fuel, the metric declined 35.9% to 9.39 cents.

JetBlue exited the third quarter of 2021 with cash and cash equivalents of $2,193 million compared with $1,918 million at the end of 2020. Total debt at the end of the reported quarter was $4,151 million compared with $4,863 million at 2020 end.

The carrier exited the September quarter with $3.3 billion of unrestricted cash, cash equivalents and short-term investments. Adjusted EBITDA in the quarter was $140 million.

Outlook

Revenues for the fourth quarter of 2021 are expected to decline in the 8-13% range from the fourth-quarter 2019 actuals.  Capacity is anticipated to decline in the 4-7% range in the December quarter from the figure reported in the fourth quarter of 2019. Average fuel cost per gallon in the December quarter is estimated to be $2.49.

Fuel consumption is expected to be roughly 198 million gallons in the fourth quarter of 2021. Capital expenditures in the December quarter and full year 2021 are anticipated to be roughly $200 million and $1 billion, respectively.

Adjusted EBITDA in the final quarter of 2021 is expected between - $50 million and $50 million. The metric is likely to be dented by increased fuel costs and a spike in expenses on labor.

CASM (ex-fuel) is expected to increase in the 14-16% band in the December quarter from the recorded fourth-quarter 2019 levels. The company, which expects unit costs to decline substantially in the second half of 2022, targets next year’s CASM (ex-fuel) to increase only in low-single digits from the 2019 levels.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -119.97% due to these changes.

VGM Scores

Currently, JetBlue has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, JetBlue has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research