JetBlue Earnings Take Off

JetBlue Airways Corp. (NASDAQ: JBLU) reported its first-quarter results Tuesday before the markets opened. The major airline had $0.40 in earnings per share (EPS) on $1.52 billion in revenue. That compared to Thomson Reuters consensus estimates of $0.39 in EPS and revenue of $1.52 billion. In the same quarter of the previous year, it posted EPS of $0.01 in EPS on $1.35 billion in revenue.

The company’s outlook for the second quarter is an increase in cost per available seat mile (CASM) between 1% and 3%, as well as an increase in capacity of 5.5% to 7.5%. Separately, there are consensus estimates of $0.45 in EPS on $1.60 billion in revenue.

JetBlue reported a record first-quarter operating revenue of $1.5 billion. The revenue per passenger mile for the first quarter increased roughly 11% on a capacity increase of 9.6%, resulting in a first-quarter load factor of 84.3%.

Yield per passenger mile in the first quarter was up 3.1% compared to the first quarter of 2014. Passenger revenue per available seat mile (PRASM) for the first quarter 2015 increased 4.5%, and operating revenue per available seat mile (RASM) increased 3.0%.

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In the first quarter, JetBlue had hedges in place for approximately 21% of its fuel consumption. This resulted in a realized fuel price of $2.06 per gallon, a 34% decrease compared to the first quarter 2014 realized fuel price of $3.14. JetBlue recorded $35 million in losses on fuel hedges settling during the first quarter.

JetBlue ended the quarter with approximately $1 billion in unrestricted cash and short-term investments. Additionally, JetBlue maintains $600 million in undrawn lines of credit.

Robin Hayes, president and CEO of JetBlue, said:

We posted strong first quarter results based on healthy demand across our network and a continued focus on cost control. Our 16,500 crewmembers delivered great customer service despite the challenges presented by winter storms. I’d like to thank all our Crewmembers for their hard work. They truly inspired humanity during this busy winter period.

So far JetBlue shares have risen 24% year to date, but within the past 52-weeks shares are up nearly 150%. In part this increase is due to lower fuel costs since last summer. With this most recent earnings release, shares are nearing and pushing new all-time highs.

Shares of JetBlue closed Monday down 0.9% at $19.71. Following the release of the earnings report, shares were initially up 1.7% at $20.05 in premarket trading. The stock has a consensus analyst price target of $21.58 and a 52-week trading range of $7.62 to $20.25.

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