A month has gone by since the last earnings report for JetBlue Airways (JBLU). Shares have added about 5.9% in that time frame, outperforming 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.
Q3 Loss at JetBlue
JetBlue reported third-quarter 2024 loss (excluding one cent per share from non-recurring items) of 16 cents per share, narrower than the Zacks Consensus Estimate of a loss of 26 cents. In the year-ago quarter, JBLU reported a loss of 39 cents.
Operating revenues of $2.36 billion beat the Zacks Consensus Estimate of $2.34 billion and increased 0.5% year over year. Passenger revenues, accounting for the bulk of the top line (92.9%), declined 0.1% to $2.19 billion. Other revenues rose 9.8% year over year to $167 million.
Revenue per available seat mile (RASM: a key measure of unit revenues) grew 4.3% year over year to 14.13 cents. Passenger revenue per available seat mile grew 3.6% year over year to 13.13 cents. The average fare at JetBlue increased 2.8% year over year to $207.46. The yield per passenger mile rose 1.9% year over year.
Consolidated traffic (measured in revenue passenger miles) declined 1.9% year over year. Capacity (measured in available seat miles) dropped 3.6% year over year. Consolidated load factor (percentage of seats filled by passengers) improved 1.5 percentage points to 86.6% as the traffic decline was less than the capacity reduction. Our estimate for load factor is pegged at 83.2%.
Total operating costs (on a reported basis) declined 4.2% year over year to $2.40 billion. Expenses on salaries, wages and benefits increased 4.7% year over year. Expenses onaircraft fuel declined 16.8% year over year.
The average fuel price per gallon (including related taxes) was $2.67, down 12.2% year over year. The reported figure was below the company guided range of $2.70-$2.80.
JBLU’s operating expenses per available seat mile (CASM) decreased 0.7% year over year. Excluding fuel, CASM rose 4.8% to $10.62.
Outlook
For fourth-quarter 2024, capacity is anticipated to decline in the 4-7% band. CASM, excluding fuel and special items, is predicted to climb 13-15%. Capital expenditures are expected to be roughly $450 million. Total revenues are forecasted to tumble in the range of 3-7%. The average fuel cost per gallon is estimated to be between $2.50 and $2.65.
For 2024, capacity is now envisioned to be down in the 2.5-4.5% range (prior view: down 2.5-5%). CASM, excluding fuel and special items, is predicted to be up in the 7 range (prior view: up 6.5-8.5%). Total revenues are forecasted to tumble in the range of 4-5% (prior view: down 4-6%). The average fuel cost per gallon is estimated to be between $2.75 and $2.80 (prior view: $2.80-$3.00).
Capital expenditures are expected to be roughly $1.6 billion.
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 -24.05% due to these changes.
VGM Scores
At this time, JetBlue has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.
Performance of an Industry Player
JetBlue belongs to the Zacks Transportation - Airline industry. Another stock from the same industry, Southwest Airlines (LUV), has gained 2.8% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Southwest reported revenues of $6.87 billion in the last reported quarter, representing a year-over-year change of +5.3%. EPS of $0.15 for the same period compares with $0.38 a year ago.
Southwest is expected to post earnings of $0.39 per share for the current quarter, representing a year-over-year change of +5.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Southwest. Also, the stock has a VGM Score of D.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
