Yahoo Finance JetBlue (JBLU) Down 2.5% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for JetBlue Airways (JBLU). Shares have lost about 2.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is JetBlue due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Narrower-Than-Expected Q4 Loss at JetBlue
JetBlue Airways’ first-quarter 2024 loss (excluding $1.68 from non-recurring items) of 43 cents per share was narrower than the Zacks Consensus Estimate of a loss of 53 cents. In the year-ago quarter, JBLU reported a loss of 34 cents.
Operating revenues of $2.21 billion edged past the Zacks Consensus Estimate of $2.2 billion. However, the top line decreased 5.11% year over year.
Passenger revenues, accounting for the bulk of the top line (93.03%), declined to $2.06 billion from $2.18 billion a year ago. Passenger revenues were hurt due to air traffic control issues in the Northeast. The metric was just ahead of our projection of $2.02 billion. Other revenues rose 5.5% to $154 million, ahead of our estimate of $151.7 million.
Other Q1 Details
All comparisons have been presented on a year-over-year basis unless mentioned otherwise.
Revenue per available seat mile (RASM: a key measure of unit revenues) declined 2.5% to 13.54 cents. Passenger revenue per available seat mile fell 3.2% to 12.60 cents. The average fare at JetBlue increased 0.1% to $214.39. The yield per passenger mile dipped 3.1%.
Consolidated traffic (measured in revenue passenger miles) declined 2.8%. Capacity (measured in available seat miles) dropped 2.7%. Consolidated load factor (percentage of seats filled by passengers) contracted 10 basis points to 79.7% as the traffic decline was more than the capacity reduction. The actual value of the load factor was less than our projection of 81.6%.
Total operating costs (on a reported basis) edged up 14% to $2.93 billion, mainly due to an 11% gain in expenses on salaries, wages and benefits. The average fuel price per gallon (including related taxes) was $2.97, down 17.3% year over year. JBLU’s operating expenses per available seat mile (CASM) increased 17.1% year over year. Excluding fuel, CASM rose 7.1% to $10.57 cents.
JetBlue, currently carrying a Zacks Rank #3 (Hold), exited the quarter with cash and cash equivalents of $1.24 billion compared with $1.16 billion at the end of 2023. Total debt at the end of the March quarter was $5.01 billion compared with $4.72 billion in 2023.
Bleak Outlook
While providing guidance for the second quarter of 2024, management stated that all comparisons had been made with respect to the second-quarter 2023 figures.
Capacity is anticipated to decline in the 2-5% band. CASM, excluding fuel and special items, is predicted to climb 5.5-7.5%. Capital expenditures are expected to be roughly $550 million. Total revenues are forecast to tumble in the range of 6.5-10.5%. The average fuel cost per gallon is estimated between $2.98 and $3.13.
For the full-year 2024, capacity is envisioned to be down in the low single digits (percentage-wise) from the 2023 actuals. CASM, excluding fuel and special items, is predicted to be up in the mid-to-high-single-digit range (percentage-wise) from the 2023 figures.
Total revenues for 2024 are anticipated to be down in the low single digits from the 2023 levels (earlier outlook projected 2024 revenues to be flat from the 2023 levels).The downbeat guidance was due to the elevated capacity of JBLU in its Latin American markets. Capital expenditures are expected to be roughly $1.6 billion in the current year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -1368.57% due to these changes.
VGM Scores
At this time, JetBlue has an average Growth Score of C, 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 C. 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
